At Taxware Systems, we want to help you get tax returns processed quickly and efficiently. Here are the top questions we’ve received during tax season and their answers.

Q: The 8863 amount is not appearing on the 1040! What’s going on?

A: The IRS has added new due diligence requirements recently, not just for Earned Income Credit but also for the American Opportunity Credit and Child Tax credits. The new due diligence can be found in the top left hand corner of the 1040 Line Input, line [03] Due Diligence with a red X if it is required. The questions that need to be answered will be in red. Once the questions are filled out, the box will have a green check mark if the client qualifies.

Q: How do I delete a form?

A: To delete a form that you do not need, simply go to Forms and Schedules and click [88] Clear Forms. Double click on the form that you do not need and it will disappear from the list.

Q: How do I e-File?

A: If you are using the A2A system, our standard way of e-filing, you can do that by clicking on [20] E-File in the Summary Menu. Then go to [02] Print 8879. After the 8879 is printed, the A2A E-File button will light up. Click on the button and a prompt will ask if you want to transmit. Click yes and that is all you need to do. You can check the status of the return by clicking on line [10] ELF Tracker from the main menu.

Q: When I make a change to my preparer or ERO information, it doesn’t reflect on the tax return…

A: Preparer and ERO information are set up outside of your tax returns and are often set up as defaults. To reflect a change made in the ERO or preparer information after starting a tax return, simply re-select the ERO or preparer on lines [04] and [05] of the basic information for that return.

If you have other questions, please feel free to contact us!

support@taxwaresystems.com

1-800-877-1065

Most taxpayers claim the standard deduction when they file a federal tax return, but some filers could lower their tax bill by itemizing. Here are some tips as you try to help your client file an accurate and advantageous tax return.

Figuring Itemized Deductions: Add up deductible expenses the client paid during the year, which include but are not limited to home mortgage interest, state and local income or sales taxes, gifts to charities, unreimbursed medical expenses and many more.

For full details on itemized deductions, limitations and special rules, please visit:

https://www.irs.gov/uac/about-publication-17

Know the Standard Deduction: If the client does not itemize, the standard deduction depends on their filing status. For 2016, if the taxpayer is:

Single: $6,300

Married Filing Jointly: $12,600

Head of Household: $9,300

Married Filing Separately: $6,300

Qualifying Widow(er): $12,600

To fill out a Schedule A, or itemized deductions, on Taxware Systems’ software, go to 1040 Line Input, line [40] or Forms and Schedules Schedule A at the top of the alphabetical list. Once inside the schedule A, fill in the amounts needed within the headers provided. If you have a grey box that cannot be filled in, that generally means that the amount is carried from somewhere else on the return.

After you have completed the Schedule A, click OK to save and the program will automatically calculate the amount for you. In this way, you can help your client choose the option that is right for them.

If you have questions, please feel free to contact us!

support@taxwaresystems.com

 1-800-877-1065

January through April can be a stressful time for us in the tax industry. We want tax returns to be done quickly and efficiently, but each return has its own complexities. To reduce stress and help tax professionals, here’s a quick guide to the most common errors on a tax return and how to avoid them using Taxware Systems’ software.

Social Security Numbers and Names: Some of the most common errors in a tax return are missing or wrong social security numbers and names. In the Taxware Systems programs, if a social security number is missing or does not have enough digits, the validity check on the Summary Menu will be red. That means that something in the basic information is incorrect, and the return will most likely be rejected. Make sure that the social security number and name on your client’s tax return matches exactly what is on the social security card.

Filing Status Errors: Another common error can be a filing status error; filing as head of household instead of single, for example. In the software, the filing statuses can be found under Basic Information Line [03]. If the filing status needs to be changed, click on the grey box with three dots next to the status and you will see the full list of options. Select the correct status by double clicking on it.

Math Errors: Most of the calculations are automatic with the Taxware Systems programs, but do make sure that the amounts you type in match the forms that your client provides.

Credits and Deductions: Many errors come about because of Earned Income Tax Credit, the standard deduction and the more complex credits. If you do need to fill out credits such as the EITC, Child Tax Credit or American Opportunity Credit, certain questions marked in red must be answered in the new due diligence found on the top left hand side of the 1040 line input. If the status of “Standard Deduction OK” needs to be changed, go to Line [25] Special Filing Categories and click on the grey box with three dots and double click on the status you need.

Note: If a return is rejected, correct the problem and transmit the return again. If a return has already been accepted with an error present, the IRS will correct simple math errors or notify you of a missing form. If there is a larger error, such as a filing status or a missing W-2, you will need to prepare an amended return.

If you have questions, feel free to contact us!

support@taxwaresystems.com

1-800-877-1065

This year the IRS has expanded due diligence questions concerning the Child Tax Credit to make sure that taxpayers and their children qualify for the credit. Here is a short guide to help tax professionals navigate this important credit.

Amount: The Child Tax Credit may help reduce federal income tax by $1,000 for each qualifying child claimed.

Additional Child Tax Credit: If the client qualifies for Child Tax Credit but gets less than the full amount, they could receive a refund, even if they owe no tax, through the Additional Child Tax Credit. This year, tax returns claiming Earned Income Credit and Additional Child Tax Credit that have refunds will be held by the IRS until February 15th.

Qualifications: There are many tests that the child must pass to qualify for the credit, including:

• The child must be under age 17 at the end of the year.
• The child must be the dependent and relative of the client.
• The child cannot file a joint return for the year, unless they are filing only to get a refund.

There are several other qualifications as well. For more information on special rules and limitations for the Child Tax Credit, please visit www.irs.gov.

To find the expanded due diligence questions in the Taxware Systems software, fill out the basic information on a client and click “Line Input” on the left hand side. Once there, you will see the Form 1040. On the far left above the automatic calculations is a large button with Due Diligence and a red X. Click on the button and the questions that need to be answered will be in red. Once those questions are answered, a green check mark will appear if the client qualifies for the credit.

Schedule 8812: If the client qualifies to claim the Child Tax Credit, make sure to check whether they need to fill out Form 8812. The same also goes for the Additional Child Tax Credit; the client will need to fill out Form 8812.

If you have questions, feel free to contact us!

support@taxwaresystems.com

1-800-877-1065

During the holiday season, people often donate money, personal belongings or property to charity. Here are some tips that you can share with your clients to help them file their tax return.

Qualified Charities: The client can deduct gifts for a qualified charity. This includes churches, synagogues, temples, mosques and government agencies, even if they do not appear on the Select Check tool provided by the IRS. Note: Warn them to be careful of phishers posing as qualifying charities. Do not open emails from a “charity” that is not familiar, and do not click on any links in the emails. The Select Check tool should be able to help you confirm actual charities.

Keep Records of All Cash Gifts: Gifts of money include those made in cash, checks, electronic funds transfer, credit card or payroll deductions. Make sure they ask for written statements or bank records from the charity. The statement must show the name of the charity, date and the contribution amount. If there are payroll deductions, have them retain a paystub or W-2 form from their employer.

Additional Records: The client needs to get an acknowledgement from the charity for each deductible donation, cash or property, of $250 or more.

Year-End Gifts: Deduct contributions in the year that they are made. If the client charges a gift to a credit card before the end of the year, it will count for 2016. The same is true of a check mailed in 2016.

Special Rules: If they give a car, boat or airplane to charity, special rules apply. Be sure they fill out Form 8283 Noncash Charitable Contributions, to report these gifts.

For more information about charitable donations, please visit

https://www.irs.gov/uac/about-publication-526 or call the IRS at 1-800-829-1040.