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Irs 2008 Child Tax Credit Worksheet Form

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					  Helping                           EITC/VIDA
 Virginians                         Training Series
    Build                           2008-2009
  Assets




What’s New This Tax Season?

         Important information
      on TY 2008 tax law changes
for Virginia’s free tax preparation sites


              December 18, 2008
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        Welcome!
           Internet meeting link
           Teleconference link
           For technical assistance, contact
            the Webinar host, Monica Adams:
                Email: adams@systemsandsoftware.org
                Chat Q&A pod (sent to host and
                 presenters)


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        Purpose of this training series
           To improve the capacity of
           Virginia’s Community Action
           Agencies, Departments of Social
           Services, and EITC coalitions to
           help Virginia’s low-income
           working families and individuals
           build their assets

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        Training series sponsors




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        Purpose of this Webinar
           To provide information on key tax law
            changes for TY 2008 to EITC coalitions and
            other agencies and volunteers offering free
            tax preparation services
           To respond to participants’ questions on TY
            2008 tax law changes




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        Today’s agenda
           Benefits of electronic filing
           Commonwealth of Virginia –
            What’s New for 2008
           Federal Taxes – What’s New For
            2008
           Audience Q&A

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        Today’s speakers




              Pam Inge                 John P. Trevillian
                 Tax Analyst             Senior Tax Specialist
                 Virginia Department     Internal Revenue
                 of Taxation             Service



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                                    Q&A
                              1. During the Q&A session,
                              dial #71 on your phone to
                              ask a question. Lines will be
                              opened in the order
                              received.

        Chat Q&A              2. At any time, submit a
                              question online via “Chat
                              Q&A.” Presenters will
                              respond to these questions
                              during the Q&A session.
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                               Poll #1:
                         Who’s with us today?
           Virginia Department of Social Services
            (state and local DSS offices)
           Community Action Agencies (CAA)
           EITC coalition site coordinators and
            volunteers
           IRS/VITA site coordinators and volunteers
           Other




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         Speaker - Pam Inge, Virginia
         Department of Taxation




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                           File Electronically
           Electronic filing is
                Faster, therefore refunds are received
                 faster
                More efficient with less errors
           The filing trend is moving to
            electronic
                3.4 Million Returns Filed (as of 10/30)
                     55% electronic filed
                     45% paper filed
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                     File Electronically, cont.
           Beginning next year, all preparers
            having 100 or more clients MUST file
            all returns using Virginia e-file

           Electronic filing is faster and more
            efficient



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                         Common Filing Errors
           Rejected direct deposits

           Returned refund checks

           Changes in Name, Address or Filing
            Status not correctly indicated or
            changed on the return



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                 Common Filing Errors, cont.
           Switching spouse name and SSN
            order from year to year
                This results in name and SSN
                 mismatches
                Always use the same spouse as the
                 primary
           Provided an incorrect or no Social
            Security Number on the tax return
           Putting estimated payments and
            withholding on wrong lines
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                 Common Filing Errors, cont.
           Not claiming the correct amount of
            estimated payments or not claiming
            any of the estimated payments made
           Made withholding errors, such as:
                The withholding is summed incorrectly
                Adding another state’s withholding to the
                 Virginia withholding


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                Common Filing Errors, cont.
           Did not provide required documents
            such as Schedule ADJ, NPY, Schedule
            CR or Out-of-State return

           Filed duplicate returns (original
            return is filed electronically and then
            a paper return is filed)

           Claimed the age deduction and did
            not include the birth date
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                Common Filing Errors, cont.
           Did not include total itemized
            deduction and state/local income
            taxes
           Did not provide codes for
            subtractions and contributions
            claimed
           Did not attach W-2’s or include the
            Schedule INC

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                 Most Common e-File Errors
           Not sending other state’s return
            when claiming Out of State Credits
            (NC & MD)
           Withholding amounts are not equal to
            or less than the State Income Tax
            withheld from W-2 fields
           On Form 760PY the itemized
            deduction in columns A & B do not
            equal Virginia Itemized Deductions

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                    How Can You Help Us

        Do not forget that direct debit tax due
         payments can be warehoused until
         their due date

        Attach Schedule ADJ with the 760
         return or NPY with the 760PY or 763
         return when any deduction is taken

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              How Can You Help Us, cont.

           Always use the most recent version
            of a form whether from coupon
            booklet, website or software

           Encourage electronic banking
                Direct Deposit
                Direct Debit



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             2008 Individual Form Changes
           Individual Income Tax
              Individual forms have minor
               changes to allow for the PTE
               Withholding and Bio-Diesel Credit

                A major change in Individual is for
                 amended returns

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            2008 Individual Form Changes, cont.
           Individual Income Amended Return
            Changes

                The Schedule ADJ will no longer be used
                 for amended Individual returns

                The entire Individual return must be
                 completed for an amended return and
                 the Amended Return bubble filled
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                         Legislative Changes
           Personal Exemptions
                $930


           Filing Threshold Increase for Filing
            Status
                Single Individuals - $11,250.
                Married Couples - $22,500.


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                    Legislative Changes, cont.
       HB 849 – Land Preservation Credit
       Procedures
             Specifies when a taxpayer is deemed to
              consent to disclosure of certain tax
              information
             Addresses procedural issues affecting pass-
              through entities
             Appeal rights are expanded and made more
              efficient
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                 Legislative Changes, cont.
        HB 1261 – Additional Withholding
        Exemptions
              Repeals the 1989 law that would have
               allowed individuals to claim additional
               personal exemptions to approximate the
               impact of itemized deductions on their
               tax liability



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                 Legislative Changes, cont.
        HB 662 – Land Preservation Credit
        Confidentiality

              Ensures the confidentiality of the copy of
               an application for land preservation tax
               credits




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                  Legislative Changes, cont.
          HB 238 and SB 286 – Exemption
          for Launch Services
                Exempt gain from the sale of launch
                 services to space flight participants or
                 the launch in some cases
                Also exempts gain on some re-supply
                 services contracts



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                 Legislative Changes, cont.
         HB 139 – Biodiesel and Green Diesel
         Fuels Credit
               Grants a credit of 1¢ per gallon (up to
                $5,000) to some taxpayers
               Taxpayers are eligible for the credit for the
                first three years of production
               This credit is transferable


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                 Legislative Changes, cont.
       HB 1024 - Filing Extensions for
       Military Personnel
       Income tax: The due date for Virginia income
       tax is extended until 90 days after the
       completion of the member’s deployment
       outside the United States




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                 Legislative Changes, cont.
     HB1023 - Collection of debts

     Expands the reciprocal agreement with the
     Federal government to include the offset of
     non-tax payments owed to the
     Commonwealth.




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                 Legislative Changes, cont.
      Neighborhood Assistance Act

      HB 680 - Automobile Donations
      SB 700 - Credit Provisions Expanded to
      include marketable securities




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                  Legislative Changes, cont.
           Domestic Employers
                Effective January 1, 2009
                First Payment will be due in 2010
                Guidelines, forms and instructions under
                 development
                Check website for updates
                  www.tax.virginia.gov


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                  Legislative Changes, cont.
           PTE Withholding
              PTEs are required to withhold tax on
               behalf of all nonresident owners, not just
               individuals
              There are Entity and Owner Exceptions

           See our website www.tax.virginia.gov for
            detailed information on all the above
            Legislative Changes


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                 Virginia Contact Information
           Tax Professional page
                http://www.tax.virginia.gov
                Be sure to join our e-mail list


           Tax Professional Hot Line
                (804) 367-9286



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        Speaker – John P. Trevillian




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            FEDERAL TAXES – WHAT’S NEW
                     FOR 2008
           Emergency Economic Stabilization Act of 2008
                Passed and signed into law on October 3, 2008.
                Over 290 changes to the tax code, including:
                     AMT Patch (again!)
                     Child Tax Credit enhancement
                     Tax provisions due to expire at end of 2007 extended
                            State and local sales tax deduction
                            Higher education tuition deduction
                            Educator expense deduction
                            Additional standard deduction for real property taxes
           Other changes affecting typical VITA returns



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                 ALTERNATIVE MINIMUM TAX
                Exemption amounts:
                 $69,950 for MFJ
                 $46,200 for Single and HOH
                 $34,975 for MFS
              Patch is only for 2008, another fix, either
               temporary or permanent, will be needed
               in 2009.



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         CHILD TAX CREDIT ENHANCEMENT
           Credit was currently refundable to the extent of 15% of
            taxpayer’s earned income in excess of $12,050.
           Under new law, the earned income floor is dropped to
            $8,500.
           Use Child Tax Credit Worksheet (included in 1040
            instruction booklets or TaxWise) to see if taxpayer is
            eligible, and if so, use Form 8812 Additional Child Tax
            Credit to determine the amount.
           Amount goes on Form 1040 Line 66.




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                 STATE & LOCAL SALES TAX
                       DEDUCTION
           Allows taxpayers who itemize to deduct state and local
            general sales taxes in lieu of state and local income taxes.
           Taxpayers can calculate their deduction amount either by
            saving receipts (actual expenses) or using the Optional
            State Sales Tax Tables (found in the instructions for Form
            1040 Schedule A).
           This provision expired at the end of 2007, but was made
            retroactive for 2008 and extended through 2009.




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             HIGHER EDUCATION TUITION &
                  FEES DEDUCTION
           Allows deduction of qualified tuition and fees paid during
            the year by a taxpayer for themselves, spouse, or
            dependent.
           Maximum deductible amount is $4000 for taxpayers with
            AGI not exceeding $65,000 ($130,000 MFJ), $2000 for
            taxpayers with AGI between $65,001 and $160,000.
           Cannot be used in conjunction with HOPE Credit or
            Lifetime Learning Credit, or if taxpayer is MFS.
           Taxpayer does not have to itemize; this is actually an
            adjustment to income which goes on Form 1040 Line 34.
           Use Form 8917 to determine amount.
           IRS Pub 970 has additional information as well.



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            EDUCATOR EXPENSE DEDUCTION
           Allows taxpayer who was an eligible educator in 2008 to
            deduct up to $250 in qualified expenses paid during 2008.
           Eligible educator is K-12 teacher, instructor, counselor,
            principal, or aide who worked in a school for at least 900
            hours during a school year.
           Qualified expenses include ordinary and necessary
            expenses paid for books, supplies, equipment, and other
            materials used in the classroom.
           Taxpayer does not have to itemize; this is actually an
            adjustment to income which goes on Form 1040 Line 23.
           Expenses that exceed $250 may be deducted as an
            employment related miscellaneous itemized deduction,
            subject to the 2% floor.


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               ADDITION TO STANDARD
             DEDUCTION FOR REAL ESTATE
                     TAXES PAID
           A taxpayer’s standard deduction can be increased by any
            state and local real estate taxes paid by the taxpayer in
            2008, up to a maximum of $500 ($1000 if MFJ).
           The taxes must be state or local real estate taxes which
            would be deductible on Form 1040 Schedule A if the
            taxpayer was itemizing.
           Check the box on Form 1040 Line 39c if the standard
            deduction claimed is increased due to this provision.
           Extended through TY 2009.



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             FIRST-TIME HOMEBUYERS TAX
                        CREDIT
           Applies to primary home purchases made by a first-time
            homebuyer between April 9, 2008 and June 30, 2009.
           First-time homebuyer is one who did not own any main
            home during the three year period ending on the date of
            purchase (restriction applies to spouse as well if married).
           Credit equal to 10% of the purchase price of the home, to
            a maximum of $7500.
           CREDIT MUST BE REPAID OVER A 15 YEAR PERIOD
            BEGINNING TWO YEARS AFTER THE YEAR IN WHICH THE
            CREDIT WAS CLAIMED.
           Complete Form 5405 to claim credit; include credit
            amount on Form 1040 Line 69.



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                RECOVERY REBATE CREDIT
           Available to taxpayers who did not qualify for an Economic
            Stimulus Payment during 2008, or who did not get the maximum
            amount.
           ESP amounts were determined using 2007 tax data, and RRC will
            use 2008 data, so taxpayers who received an ESP may qualify for
            additional (or less) monies under RRC.
           Maximum amounts are the same as for ESP:
               $600 ($1200 if MFJ)
               $300 per child (who must qualify for CTC to be eligible)
           The RRC will be reduced by the amount of ESP received by
            taxpayer; negative amounts DO NOT HAVE TO BE REPAID.
           To determine credit, complete worksheet found in Instructions for
            Form 1040, and include amount (if positive) on Form 1040 Line
            70.




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                 MISCELLANEOUS CHANGES
           Residential Energy Efficient Property Credit (pertains to
            energy generating devices) extended through 2016, BUT
            NOT the Credit for non-Business Energy Property (which
            pertained to storm doors, windows, etc.)
           AGI limit for claiming the Retirement Savings Credit
            increased to $26,500 ($39, 750 if HoH, $53,000 if MFJ).
           5% Capital Gain Tax on lowest brackets reduced to zero.
           IRA deduction increased to $5000 ($6000 if age 50 or
            older).
                Visit www.IRS.gov for additional
                information on these and other tax
                          related issues.


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              Speakers’ Contact Information

    Pam Inge                         John P. Trevillian
    (804) 367-0330                   (804) 916-8729
    Pam.Inge@tax.virginia.gov        john.p.trevillian@irs.gov
    Virginia Department of           Internal Revenue Service
     Taxation                         http://www.irs.gov/
    http://www.tax.virginia.gov




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                                    Q&A
                              1. During the Q&A session,
                              dial #71 on your phone to
                              ask a question. Lines will be
                              opened in the order
                              received.

        Chat Q&A              2. At any time, submit a
                              question online via “Chat
                              Q&A.” Presenters will
                              respond to these questions
                              during the Q&A session.
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                   Training Series Updates

    “Making the Link: Virginia’s Earned Income Tax
     Credit EITC) Initiatives and Virginia Individual
     Development Accounts (VIDA)
        Recorded October, 2008
        http://www.state-itc.org/building_assets.html
    A recorded version of today’s Webinar will shortly
     be available online, on demand. You will receive
     an email notice when it is available.



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                              Save the Date!
                Thursday, January 29, 2009 -
                 9am-10am EST
                “Financial Education Resources for
                 EITC Recipients”
                Webinar registration information
                 will follow in January



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         Wrap up and Evaluations
            Thanks to everyone who participated in today’s
             Webinar!
            To conclude today’s Webinar, a brief online
             evaluation should open in a new Web browser page.
                  Please complete the online evaluation
                  Press Submit
            Note: If the browser page is minimized or blocked,
             go directly to the online evaluation at:
             http://vovici.com/wsb.dll/s/f4ecg39fc7




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Description: Irs 2008 Child Tax Credit Worksheet Form document sample