2011 Volunteer Tax Preparation. NJ Division of Taxation

Transcription

1 2011 Volunteer Tax Preparation NJ Division of Taxation

2 Important Contact Information Regional Information Centers Customer Service Center 609/ Division of Revenue E-File Unit 609/ Training & Outreach

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5 New for 2011 Emancipation Day!!! Returns due April 17 th, 2012 Charitable Contributions One new charity New Jersey Lung Cancer Research Fund

6 Reminders Roth IRA Conversions done in /2012 Tax Reporting Form NJ-1040-H Property Tax Credit No Tenant Rebate Application Suspended by the State Budget Form 1099-G no longer mailed

7 Important Processing Information Do not staple, clip or otherwise attach pages together Place only 1 return for each envelope You may not report a loss on Form NJ-1040 Leave unused lines Blank

8 Form NJ-1040 Identifying Information Page 1

9 Civil Union / Domestic Partner Civil Union Couples Filing Status Married under NJ Law IRS does not recognize CU s Domestic Partner Exemption Not Married Line 6 Exemption may apply If partner does not file NJ-1040

10 Line 11: Dependents Attending College Must be a dependent Line 9 or 10 Full-time College Student Defined by Institution Under age 22 For Entire Tax Year

11 Form NJ-1040 Reportable Income Page 2

12 Social Security Tax-Exempt Income Unemployment Compensation Debt Cancellation Form 1099-C Military Pensions Refer to page 21

13 Wages (Line 14) Use W-2 Box 16, State Wages State wages often differ from Federal wages (Box 1) All W-2s received must be included with the NJ-1040

14 W-2 Sample

15 Tax-Exempt Interest (Line 15b) Obligations of the State of New Jersey and/or any of its political subdivisions Direct Federal Obligations Pub GIT-5, Exempt Obligations Refer to page 23 Must enclose an itemized schedule if line 15b is over $10,000

16 Net Profits from Business (Line 17) Federal Schedule C Use Federal Expenses and Deduction 100% Meal/Entertainment Deduction Line 17 Blank if Net Loss See page 23, NJ Instruction Booklet

17 Reporting Pension, Annuity, and IRA Income Line 19

18 Retirement Plans Contributory Non-Contributory fully taxable

19 Three-Year Rule / General Rule NJ accounting methods No Simplified Method Client needs Contribution Records Often varies from Federal Treatment

20 Three-Year Rule If employee contributions recovered within 36 months of date of first pension payment Pension income is not reported until contributions are recovered IRS no longer allows three year rule

21 General Rule Percentage is used based on proportionate share of Contributions to Total Value of the Pension This is applied each year to the Pension amount received Use Worksheet A, pg 24, to determine which pension method to use

22 2010 Conversions to Roth NJ Following the IRS Deferred until NJ/Fed reporting must be the same

23 IRA Withdrawals Use Worksheet C, Page 26 Client Record Keeping IRA Contributions Prior Year Worksheet C Roth Distributions Exempt if Qualified page 27

24 Taxable Pension (Line 19) Line 19 is for the total of: Taxable Pensions (after reduction by Three-year or General Rule) Taxable Annuities Taxable IRAs

25 Gambling Winnings (Line 23) Include Casino and Track Betting Include NJ Lottery Winnings Only with prizes exceeding $10,000 Substantiated Losses Can be used to Net total winnings

26 Record Keeping - Losses Substantiated through: Daily log Journal Canceled check Losing race track pari-mutuel tickets Losing Lottery Tickets

27 Pension Exclusion (Line 27a) Eligibility: Age 62/older or Disabled Total income of $100,000 or less Amounts Based on Filing Status $20,000 MFJ/HOH/Widow $15,000 Single $10,000 - MFS

28 Retirement Exclusion (Line 27b) Taxpayer may deduct unused Pension Exclusion from Line 27a if: Line 14 Earned Income Line 17 Line 20 Line 21 Total less than $3,000

29 Gross Income (Line 28) No Filing Required if: $10,000 or less Single Married/CU - Filing Separate $20,000 or less Married/CU Filing Joint Head of Household Qualifying widower

30 Medical Expenses (Line 30) Unreimbursed medical expenses Include MSA Contributions (Archer) Expenses in excess of 2% of line 28 Gross Income Worksheet E, Page 31

31 Property Tax Deduction/Credit Enter total property taxes paid (or 18% rent) on line 36a Include Homestead Benefit received as a credit PTR applicants use base year amount Residency Status Line 36b Homeowner/Tenant

32 Property Tax Deduction/Credit Worksheet F determines the greater benefit Deduction Limited to $10,000 $5,000 MFS Enter Property Taxes Paid on Line 36c or a flat $50 credit on Line 48

33 Tax (Line 38) Show NJ Tax amount based on taxable income Tax Tables (Pg 53) Tax Rates (Pg 62)

34 Form NJ-1040 Calculating Tax and Payments Page 3

35 Credit for Taxes Paid (Line 40) Used for NJ Residents who have income subject to tax out of the state Schedule A must be completed Note: Income must be reported on the NJ-1040

36 Use Tax (Line 44) Purchases out of state No NJ Sales Tax Estimated Use Tax Chart (pg 39) Absent of Purchase Records Enter 0.00 if no Use Tax is due

37 NJ Income Tax Withheld (Line 47) Form W-2, Box 17 (State Income Tax Withheld) Form 1099-R (Pensions, etc) Include amounts from all W-2s & 1099s received Note: Be sure W-2, Box 15 Shows NJ

38 Eligibility Earned Income Tax Credit (Line 50) All NJ Residents who qualify for Federal EITC are eligible to apply subject to review Calculated Amount 20% of Federal EIC amount

39 Excess UI/DI/FLI (Lines 51-53) For people with: Multiple employers Multiple W-2s With excess UI/DI/FLI contributions Must complete and include Form NJ-2450 with NJ-1040

40 Underpaid or Overpaid Compare Total Payments (Line 54) to Total Tax (Line 46) If Line 54 is greater than line 46, the difference is an overpayment If Line 54 is less than line 46, the difference is due to the state

41 Refund Amount (Line 65) Overpayments can be: Left as a credit for next year; Donated (all or in part) to various charitable designations; or Refunded to the Taxpayer Be sure to include requested refund amount on Line 65

42 Part-Year Residents Resident only Part of the Tax Year Complete Residency Status Page 1, Form NJ-1040 Allocate Income Just NJ Residency Period Pro-Rate Exemptions and Deductions by Number of Months in NJ

43 Property Tax Relief Programs Form NJ-1040-H Certain filers only Homestead Benefit Only Homeowners Property Tax Reimbursement Homeowners/Mobile Home Owners

44 Form NJ-1040-H Property Tax Credit ($50) Age 65/Ovr or Disabled No NJ Income Tax Return Filed Under Filing Threshold Did not own Residence on 10/1/11

45 Homestead Benefit Owned/Occupied Residence On 10/1/11 Gross Income Under regardless of filing status $150,000 65/Ovr or Disabled $75,000 Everyone else Paid as Direct Property Tax Credit No Tenant Rebate Application Suspended by the State Budget

46 PTR - Eligibility Must be Age 65/ovr or Disabled by 12/31/2010 NJ Resident for at least 10yrs Owned and lived in the home for at least 3 years Have fully paid property taxes due by June 1 st of following year

47 Property Tax Reimbursement Income Eligibility Limits 2010 Single/Married $80, Single/Married $80,000

48 PTR Income Limits Virtually all gross income is included for PTR eligibility Social Security Unemployment Military Pension NJ Lottery Winnings This will often vary from the income tax form

49 PTR First Time Filers Form PTR-1 available online Establishes 2010 and 2011 Eligibility Reserves Base Year at 2010 Level Difference of 2011 & 2010 Taxes Proof of Property Taxes must be included with all PTR applications

50 PTR 2 nd and Later Years File Form PTR-2 Comes Pre-Printed with Base Year Verifies 2011 Eligibility Difference of 2011 and Base Year Proof of Property Taxes must be included with all PTR applications

51 Budgetary Approval All Property Tax Relief Benefits are Subject to Change NJ FY 2013 Budget Passed by June 30 th, 2012

52 Property Tax Relief Assistance Homestead Benefit Property Tax Reimbursement NJ Tax Hotline

53 Thanks to our volunteers!