USA Funds University Tax Transcripts and Verification Requirements

Transcription

1 USA Funds University Tax Transcripts and Verification Requirements WASFAA Conference May 20, 2013

2 Special Note These materials are for the benefit of financial aid professionals and other campus administrators. They are intended to provide current facts and information and are not intended to be legal advice. These materials contain information related to Federal Title IV student aid programs and have neither been reviewed nor approved by the U.S. Department of Education. You are encouraged to seek your own competent legal counsel in connection with the topics covered in these materials. USA Funds disclaims all responsibility for any claim arising from reliance on the information provided. Copyright 2013 United Student Aid Funds, Inc. All Rights Reserved. Questions regarding the content of this publication should be addressed to USA Funds University, P.O. Box 6028 Indianapolis, IN or by calling (317)

3 Tax Transcripts and Verification Requirements 34 CFR Federal Register, Vol. 77, No. 134, p Dear Colleague Letter GEN When a student's application is selected for verification by the CPS, certain information must be documented and validated by the school. The regulations specify that the items schools must verify and the acceptable documentation for each item will be defined by ED on an annual basis and could change from one year to the next. Requirements for each year will be outlined in the Federal Register approximately four to six months prior to the start of each application cycle. On July 12, 2012, the Department informed schools of the information that must be verified for the award year. The Federal Register and subsequent guidance listed the documentation an applicant must provide to the school to verify the accuracy of each required item Required Verification Items Non-dollar items for certain applicants selected for verification: u Household size. u Number in college. u Child support paid. u Supplemental Nutrition Assistance Program, commonly known as Food Stamps. u High school completion. u Identity/educational purpose. Yes Was or will a federal income tax return be filed? No Additional required verification items: u Adjusted gross income. Additional required verification item: u Income earned from work. u Federal income taxes paid. u Untaxed IRA distributions. u Untaxed pensions. u Education credits. u IRA deductions. u Tax exempt interest income. Customized Verification Process 34 CFR Dear Colleague Letter GEN While transitioning to a customized verification process, during the award year, ED will use Verification Tracking Flags to place an applicant selected for verification into one of five Verification Tracking Groups. The individual items that must be verified for each applicant are based on the Verification Tracking Group to which the applicant has been assigned. 1

4 Verification Tracking Groups and Required Information Verification Tracking Flag Verification Tracking Group Name Information Required to be Verified Tax Filers: u Household Size Non-Tax Filers: u Household Size u Number in College u Number in College u Child Support Paid u Child Support Paid u SNAP (Food Stamps) u SNAP (Food Stamps) V1 Standard Verification Group u AGI u U.S. Tax Paid u Income Earned from Work u Untaxed IRA Distributions u Untaxed Pensions u Education Credits u IRA Deductions u Tax-Exempt Interest V2 SNAP Verification Group SNAP (Food Stamps) V3 Child Support Paid Verification Group Child Support Paid u Child Support Paid V4 Custom Verification Group u SNAP (Food Stamps) u High School Completion Status u Identity/Statement of Educational Purpose Tax Filers: u Household Size Non-Tax Filers: u Household Size u Number in College u Number in College u Child Support Paid u Child Support Paid u SNAP (Food Stamps) u SNAP (Food Stamps) u High School Completion Status u High School Completion Status V5 Aggregate Verification Group u Identity/Statement of Educational Purpose u AGI u Identity/Statement of Educational Purpose u Income Earned from Work u U.S. Tax Paid u Untaxed IRA Distributions u Untaxed Pensions u Education Credits u IRA Deductions u Tax-Exempt Interest Adapted from: Dear Colleague Letter GEN

5 Summary of Tracking Group Requirements Verification Tracking Group Information Required to be Verified V1 V2 V3 V4 V5 Household size X X Number in college X X Child support paid* X X X X SNAP (Food Stamps)* X X X X High school completion X X Identity/educational purpose X X Income/tax data X X * Information must be verified if reported on the FAFSA. Verification Flag and Verification Tracking Flag on ISIR Verification Flag and Verification Tracking Flag on FAA Access to CPS Online NOTES 3

6 Acceptable Documentation 34 CFR Federal Register Vol. 77, No. 134, p Dear Colleague Letter GEN FSA Handbook, Application and Verification Guide. Acceptable documentation requirements can be divided into four categories non-dollar items, non-tax filers, tax filers without special circumstances and applicants with special circumstances. Non-Dollar Items Applicants selected for verification may be expected to document answers provided on the FAFSA regarding household size, number in college, child support paid and the receipt of SNAP benefits. New for the award year, applicants also may need to verify their high school completion or provide documentation of identity and a Statement of Educational Purpose. Item Household Size Verification Tracking Flag V1 V5 Acceptable Documentation Completed verification worksheet or signed statement from the applicant (and one parent, if dependent) listing the name and age of each household member and the relationship to the applicant. Not required when: u Dependent student lists 2 and parent is single, divorced, separated or widowed. u Dependent student lists 3 and parents are married. u Independent student lists 1 and student is single, divorced, separated or widowed. u Independent student lists 2 and student is married. Number in College Child Support Paid* SNAP (Food Stamps)* V1 V5 V1 V3 V4 V5 V1 V2 V4 V5 Completed verification worksheet or signed statement from the applicant (and one parent, if dependent) listing the name and age of each household member attending a Title IVeligible school at least half time for the award year, and the name(s) of the applicable school(s). Not required when number in college is 1. If the school believes information from the FAFSA or signed statement is inaccurate, it must obtain a statement from each listed school unless the household member is not yet registered or will attend the applicant s school. Completed verification worksheet or signed statement from applicant (or parent, if dependent) listing: u Name of the individual who paid support. u Name of the child support recipient. u Name(s) of the children for whom support was paid. u Amount of support paid during the calendar year. If the school believes information to be inaccurate, it must obtain documentation such as a copy of a separation agreement/divorce decree showing the amount to be paid, a statement from the child support recipient showing the amount paid, or copies of cancelled checks or money order receipts. Completed verification worksheet or signed statement from the applicant (and one parent, if dependent) certifying that they, or another member of the household, received SNAP in calendar year 2011 or If the institution has reason to believe the signed statement is inaccurate, it must obtain documentation from the applicable issuing agency. * Information must be verified if reported on the FAFSA. 4

7 Item High School Completion Status Verification Tracking Flag V4 V5 Acceptable Documentation Documentation of high school diploma, recognized equivalent or homeschool credential: u Copy of applicant s high school diploma or final high school transcript that shows the date the applicant completed secondary school, or alternative documentation if neither of these is available. u Copy of one of the recognized equivalents of a high school diploma: General Educational Development certificate. Certificate recognized by the state as an equivalent to a diploma. Academic transcript showing successful completion of at least a two-year program fully acceptable toward a bachelor s degree. Documentation that the student excelled in high school if the student did not complete high school and enrolls in at least an associate degree program. u Copy of homeschool documentation: Transcript signed by the parent or guardian documenting the successful completion of secondary education, listing the courses completed by the student; OR State-issued homeschool certification credential. Each applicant must provide in person to an official authorized by the school the following documentation: u Government-issued photo identification, such as a driver s license, other state-issued ID or passport; AND u Signed Statement of Educational Purpose for the award year. Identity/ Statement of Educational Purpose V4 V5 For documentation presented in person, the school must maintain an annotated copy of the ID provided by the student including: u Date the identifying document was received; AND u Name of the school official that obtained the documentation. If an applicant is unable to provide the information in person, the following must be provided to the school: u Copy of a government-issued photo identification, such as a driver s license, other state-issued ID or passport; AND u Original notarized Statement of Educational Purpose signed by the applicant for the award year. Schools must use the EXACT language provided by the Department in the Statement Of Educational Purpose for students in the V4 or V5 Verification Tracking Groups. See Appendix A. 5

8 Non-Tax Filers When completing the FAFSA, students (and parents of dependent students) who indicate they will not file federal income tax returns will be required to affirm that they have not filed a federal income tax return and are not required by IRS regulations to do so. If selected for verification, and if they earned any income during 2012, they will be required to provide the following documentation. Item Income Earned from Work Verification Tracking Flag V1 V5 Acceptable Documentation u Copy of a W-2 Form for each source of employment from 2012; AND u Signed statement certifying the applicant has not filed and is not required to file taxes for 2012; AND u Signed statement indicating sources and amounts of income earned from work in 2012 not listed on a W-2 Form. If the applicant is unable to obtain the required W-2 Form(s), the school instead may accept a signed statement listing the source and amount of income earned from work, and the reason the W-2 Form(s) is not available W-2 Form In addition to income earned from work, the W-2 form may also reveal sources of untaxed income, such as payments to tax-deferred pension and savings plan amounts reported on in boxes 12a through 12d, coded D, E, F, G, H and S. NOTES 6

9 Tax Filers Without Special Circumstances When using FAFSA on the Web, students (and/or parents of dependent students) who indicate they filed federal income tax returns will be encouraged to retrieve their IRS income data to populate the appropriate FAFSA fields. If IRS data is not retrieved, or if it was retrieved and then changed, applicants selected for verification will be asked to provide documentation obtained from the IRS. Item AGI U.S. Tax Paid Untaxed IRA Distributions Untaxed Pension Education Credits IRA Deductions Tax-Exempt Interest Verification Tracking Flag V1 V5 Acceptable Documentation No documentation required if the applicant (and/or parent, if dependent): u Used the IRS Data Retrieval Tool and the information is unchanged (02 IRS Request Flag). Tax transcript required if the applicant (and/or parent, if dependent): u Did not or could not use the IRS Data Retrieval Tool; OR u Did use the tool but subsequently changed any of the data. Trainer s Tidbit Tax Data One common area where conflicting information arises is through the school s review of an applicant s tax returns. According to the Federal Student Aid Handbook, [Financial aid administrators] must have a fundamental understanding of relevant tax issues that can considerably affect the need analysis (p. AVG-117). ED refers financial aid administrators to specific pages in IRS Publication 17 as a resource for understanding basic tax law and detecting when conflicting tax information affects Title IV eligibility. Financial aid administrators are required to know: u Whether a person was required to file a tax return. u What the correct filing status for a person should be. u That an individual cannot be claimed as an exemption by more than one person. NOTES 7

10 Applicants With Special Circumstances ED describes certain applicants as having special circumstances if they: u Filed a joint return and are: Separated, divorced or widowed. Married to someone other than the individual included on the joint return. u Were granted an extension to file. u Cannot obtain a tax transcript by the IRS. Tax Filers Who Filed a Joint Return and Are Separated, Divorced, Widowed or Remarried Tax filers could qualify to file a joint income tax return based on marital status as of December 31 of the tax year and subsequently indicate a different marital status by the time they are applying for federal financial aid. In this case, it is not appropriate to retrieve IRS data. Instead, these tax filers should skip the IRS data retrieval tool, making sure to correctly reflect their income, taxes paid and untaxed income. Documentation When selected for verification, these applicants will be expected to provide: u A tax transcript listing the tax filer s information for the applicable tax year; AND u W-2 Forms if the student (and/or the dependent student s parent) no longer is married to the individual on the joint return, for each employment source for the student or dependent student s parent(s) whose income is used to calculate the applicant s Expected Family Contribution. If the individual is self-employed or if a W-2 Form is not available, a school may accept a signed statement of the AGI and taxes paid. The W-2 Forms will serve to document the portion of any earned income which belongs to the tax filer. The school then will be responsible for adjusting the AGI and taxes paid using the documentation received. Trainer s Tidbit Using a Joint Return to Figure Individual AGI and Taxes Paid FSA Handbook, Application and Verification Guide, p. AVG-88. "If the filer of a joint return has become widowed, divorced, or separated since filing the return, it may be necessary to determine the individual s income and taxes paid using the joint return and W-2 forms." Item Documentation Adjustment AGI Taxes Paid W-2 Forms IRS Tax Forms Calculate the individual's AGI using income amounts from W-2 Forms and add that to any other income that can be extracted from the joint return. Interest or dividends paid from joint accounts or joint business income or loss used to calculate the AGI should be assessed at 50 percent. Calculate new taxes paid either using the IRS tax tables (preferred method) or by using a proportional calculation: (Individual AGI / Joint AGI) x Joint taxes paid = New individual taxes paid 8

11 Tax Filers Granted an Extension to File Some tax filers may apply to the IRS for an extension of the deadline to file their federal income tax returns. Typically, a six-month extension is requested using IRS Form 4868, though the IRS may approve longer extension periods. If the tax return has not been filed by the time the tax filer is completing the FOTW, no tax data will be available and the tax filer will not be able to use the IRS data retrieval process. Schools cannot delay the verification processing because a tax-filing extension was granted. If an extension is granted, the school must complete verification using alternative documentation: u Copy of Form 4868 or a copy of the IRS approval of the extension beyond the six-month period. An applicant s U.S. taxes paid will come from Line 4 of the IRS Form u Copy of a W-2 Form for each source of employment received in the base year by the individual granted the extension or a signed statement of Adjusted Gross Income and tax paid if the individual is self-employed. An applicant s AGI will come from Box 1 of the W-2 Form (or signed statement). Schools have the option of collecting tax data from extension filers once their federal income tax returns have been filed with the IRS. Any tax transcripts or tax returns received by the school must be used to re-verify the income information. 9

12 Applicants for Whom a Transcript Cannot be Provided or Located FSA Handbook, Application and Verification Guide, Ch. 4. The table below outlines ED s guidance for when an applicant selected for verification cannot obtain a tax transcript from the Internal Revenue Service. Acceptable Documentation When a Transcript Cannot be Provided Issue Acceptable Documentation Identity Theft For victims of identity theft who are selected for verification, if Form was not required, or the tax filer does not have a copy of the form, now the school instead may accept either of the following items: u A signed copy of the filed tax return and a copy of a filed police report. u A signed copy of the filed tax return and a signed statement that the filer was the victim of identity theft that the Internal Revenue Service is investigating. Alternative documentation is acceptable if an attempt to obtain a tax transcript is unsuccessful and the following documentation is collected by the school. Unsuccessful Requests for IRS Transcripts* Foreign Tax Returns If the transcript request was made using a paper form, the filer must sign and submit a copy of the: u Filed tax return; AND u IRS response informing the filer the request was unsuccessful; AND u Form 4506T-EZ or 4506-T with third-party information provided. If the transcript request was made online, the filer must sign and submit a copy of the: u Filed tax return; AND u Print screen from the official IRS website indicating the request was unsuccessful; AND u Form 4506T-EZ or 4506-T with third party information provided. If the accuracy of the tax return information is not questionable, the school completes verification and places the signed copy of Form 4506 in the applicant s file. If the school has reason to believe that the tax return information is inaccurate, Form 4506 must be sent to the IRS and the school must wait for the return of either a transcript or confirmation that the transcript is not available for the filer before proceeding with verification. For individuals who filed foreign tax returns and cannot obtain a tax transcript, the school now must collect signed copies of the foreign returns or other information listing similar income and tax information, converted to U.S. dollars. If the individual is not required to file taxes under that nation s process, the school should accept a signed statement certifying income and taxes paid, if any, for the applicable period. U.S. Territory or Commonwealth Tax Returns If the individual filed a tax return with Puerto Rico, Guam, American Samoa or the Commonwealth of the Northern Mariana Islands, the school now should accept a signed copy of the applicable tax return. If the individual filed a tax return with the Republic of the Marshall Islands, the Republic of Palau or the Federated States of Micronesia (the Freely Associated States), the school should accept a signed copy of the individual s wage and tax statement for each employer, in addition to a signed statement that lists all income and taxes for the tax year. Amended Returns For individuals who filed amended returns, schools now must obtain a signed copy of the original filed tax return or tax return transcript, and a signed copy of the Form 1040X. * This guidance only is effective through the end of the award year. 10

13 Effect of Amending Tax Returns When was the amended tax return filed? Before completing the initial FAFSA After completing the initial FAFSA Tax filer cannot access amended information through the IRS data retrieval process. Tax filer cannot access amended information through the IRS data retrieval process. These individuals are expected to use their own financial data from the amended tax return to complete the FAFSA. These individuals are expected to use their own financial data from the amended tax return to complete the FAFSA. Tax filer must correct the FAFSA to reflect the amended tax data. Is the applicant selected for verification? No Yes Continue to process the application as usual. Alternate documentation is required to complete verification: u A signed copy of the IRS Form 1040X that was filed with the IRS; AND u A signed copy of the original tax return, original tax data on a tax return transcript, Record of Account Transcript, or Return Transcript for Taxpayer. NOTES 11

14 IRS Tax Transcripts Upon request, the IRS provides tax filers with transcripts of their federal income tax returns. Increased reliance on tax transcripts to validate FAFSA information means financial aid administrators need to be familiar with how these documents can be obtained by students and parents, and how to review the information they contain. Typically, transcripts are available for the current and past three years. The IRS makes two types of transcripts available: u Tax Return Transcript: Provides original answers for most line items on the tax return. u Tax Account Transcript: Provides some of the information found on a tax return transcript, along with any adjustments made by the tax filer or the IRS after the original return was filed. Requesting Tax Transcripts There are several ways tax filers can request a tax transcript, most of which do not involve payment of a fee to the IRS. Some methods take longer for processing than others. Tax Transcript Output Document Request Method Where? What? How? When? Direct to Third Party? Online Paper Mailed 5-10 days No Telephone (800) Paper Mailed 5-10 days No IRS Form 4506T-EZ -pdf/f4506tez.pdf Paper Mailed 5-10 days Yes Trainer s Tidbit Program Integrity Questions and Answers Verification www2.ed.gov/policy/highered/reg/hearulemaking/2009/verification.html. DOC-Q14. What tax information should an institution use when both the IRS Data Retrieval Tool is used and an IRS Tax Return Transcript is obtained? DOC-A14. Institutions are not required to obtain an IRS Tax Return Transcript to complete verification for individuals who successfully utilized the IRS DRT. If an institution obtains a copy of a tax filer s IRS Tax Return Transcript, any amount(s), including the per computer amount(s), on the transcript that is different from the amount reported on the FAFSA by $25 or more must be corrected on the FAFSA through CPS. However if an institution is required to submit any change through CPS as a result of verification it must submit all changes, including amounts that are below the $25 tolerance. (Sections (f ), (a), and (a)(2)). [Guidance issued 09/13/2012] NOTES 12

15 Comparison of 2012 Tax Return and Tax Transcript Data FAFSA instructions direct applicants to obtain information from certain lines on IRS income tax returns, which differ based on whether the tax filer completed a Form 1040, 1040A or 1040EZ. For the most part, the instructions are able to identify the relevant lines on the tax return by line number. These line item numbers do not appear on IRS tax transcripts. Instead, each item is identified by name. When verifying FAFSA data using tax transcripts, it is important to identify the correct answer for comparison. The following pages contain sample tax returns for Hunter Davis (IRS Form 1040-EZ), Elizabeth Moore (IRS Form 1040-A), and Ethan and Miranda James (IRS Form 1040), as well as sample IRS Tax Transcripts for these filers. Relevant line items have been highlighted as follows: Red: information to help cross-reference tax return line items with corresponding data on the tax return transcript. Yellow: tax return line items that are required verification data elements for the award year. Blue: tax return line items listed in the FAFSA instructions, which should be reviewed for potential conflicting information. Tax Return Line Items for Verification EZ A Tax-exempt interest income. N/A 8b 8b Untaxed portions of IRA distributions. Excludes rollovers. Untaxed portions of pensions. Excludes rollovers. N/A 11a minus 11b 15a minus 15b N/A 12a minus 12b 16a minus 16b IRA/Keogh deductions. N/A plus 32 AGI Education credits. N/A Income tax paid

16 Sample IRS Form 1040EZ: Hunter Davis Form 1040EZ Department of the Treasury Internal Revenue Service Income Tax Return for Single and Joint Filers With No Dependents (99) 2012 OMB No Your first name and initial Last name Your social security number Hunter J. Davis AAA AA AAAA If a joint return, spouse s first name and initial Last name Spouse s social security number Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Make sure the SSN(s) 1629 Market Street above are correct. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Oklahoma City, OK Presidential Election Campaign Check here if you, or your spouse if filing Foreign country name Foreign province/state/county Foreign postal code jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. You Spouse Income 1 Wages, salaries, and tips. This should be shown in box 1 of your Form(s) W-2. Attach your Form(s) W-2. Attach Form(s) W-2 1 7, here. 2 Taxable interest. If the total is over $1,500, you cannot use Form 1040EZ. 2 Enclose, but do not attach, any payment. Payments, Credits, and Tax Refund Have it directly deposited! See instructions and fill in 11b, 11c, and 11d or Form Amount You Owe Third Party Designee Sign Here Joint return? See instructions. Keep a copy for your records. Paid Preparer Use Only 3 Unemployment compensation and Alaska Permanent Fund dividends (see instructions). 3 4 Add lines 1, 2, and 3. This is your adjusted gross income. 4 5 If someone can claim you (or your spouse if a joint return) as a dependent, check the applicable box(es) below and enter the amount from the worksheet on back. You Spouse If no one can claim you (or your spouse if a joint return), enter $9,750 if single; $19,500 if married filing jointly. See back for explanation. 5 6 Subtract line 5 from line 4. If line 5 is larger than line 4, enter -0-. This is your taxable income. 6 7 Federal income tax withheld from Form(s) W-2 and a Earned income credit (EIC) (see instructions). 8a b Nontaxable combat pay election. 8b 9 Add lines 7 and 8a. These are your total payments and credits Tax. Use the amount on line 6 above to find your tax in the tax table in the instructions. Then, enter the tax from the table on this line a If line 9 is larger than line 10, subtract line 10 from line 9. This is your refund. If Form 8888 is attached, check here 11a b Routing number c Type: Checking Savings d Account number 12 If line 10 is larger than line 9, subtract line 9 from line 10. This is the amount you owe. For details on how to pay, see instructions. 12 Do you want to allow another person to discuss this return with the IRS (see instructions)? Yes. Complete below. No Designee s name A A A A A A A A A B Phone no. Personal identification number (PIN) Under penalties of perjury, I declare that I have examined this return and, to the best of my knowledge and belief, it is true, correct, and accurately lists all amounts and sources of income I received during the tax year. Declaration of preparer (other than the taxpayer) is based on all information of which the preparer has any knowledge. Your signature Date Your occupation Daytime phone number B B B B B B B B B B B B B B B B 1/31/2013 Student (555) , , Spouse s signature. If a joint return, both must sign. Date Spouse s occupation If the IRS sent you an Identity Protection PIN, enter it here (see inst.) Print/Type preparer s name Preparer s signature Date Check if PTIN self-employed Firm s name Firm's EIN Firm s address Phone no. For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see instructions. Cat. No W Form 1040EZ (2012) 7,

17 Form 1040EZ (2012) Page 2 Use this form if Your filing status is single or married filing jointly. If you are not sure about your filing status, see instructions. You (and your spouse if married filing jointly) were under age 65 and not blind at the end of If you were born on January 1, 1948, you are considered to be age 65 at the end of You do not claim any dependents. For information on dependents, see Pub Your taxable income (line 6) is less than $100,000. You do not claim any adjustments to income. For information on adjustments to income, use the TeleTax topics listed under Adjustments to Income at (see instructions). The only tax credit you can claim is the earned income credit (EIC). The credit may give you a refund even if you do not owe any tax. You do not need a qualifying child to claim the EIC. For information on credits, use the TeleTax topics listed under Tax Credits at (see instructions). If you received a Form 1098-T or paid higher education expenses, you may be eligible for a tax credit or deduction that you must claim on Form 1040A or Form For more information on tax benefits for education, see Pub You had only wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends, and your taxable interest was not over $1,500. But if you earned tips, including allocated tips, that are not included in box 5 and box 7 of your Form W-2, you may not be able to use Form 1040EZ (see instructions). If you are planning to use Form 1040EZ for a child who received Alaska Permanent Fund dividends, see instructions. Filling in your return If you received a scholarship or fellowship grant or tax-exempt interest income, such as on municipal bonds, see the instructions before filling in the form. Also, see the instructions if you received a Form 1099-INT showing federal income tax withheld or if federal income tax was withheld from your unemployment compensation or Alaska Permanent Fund dividends. For tips on how to avoid common mistakes, see instructions. Remember, you must report all wages, salaries, and tips even if you do not get a Form W-2 from your employer. You must also report all your taxable interest, including interest from banks, savings and loans, credit unions, etc., even if you do not get a Form 1099-INT. Worksheet for Line 5 Dependents Who Checked One or Both Boxes (keep a copy for your records) Mailing Return Use this worksheet to figure the amount to enter on line 5 if someone can claim you (or your spouse if married filing jointly) as a dependent, even if that person chooses not to do so. To find out if someone can claim you as a dependent, see Pub A. Amount, if any, from line 1 on front , Enter total A. B. Minimum standard deduction B. C. Enter the larger of line A or line B here C. D. Maximum standard deduction. If single, enter $5,950; if married filing jointly, enter $11,900. D. E. Enter the smaller of line C or line D here. This is your standard deduction E. F. Exemption amount. If single, enter -0-. If married filing jointly and }F. both you and your spouse can be claimed as dependents, enter -0-. only one of you can be claimed as a dependent, enter $3,800. G. Add lines E and F. Enter the total here and on line 5 on the front G. If you did not check any boxes on line 5, enter on line 5 the amount shown below that applies to you. Single, enter $9,750. This is the total of your standard deduction ($5,950) and your exemption ($3,800). Married filing jointly, enter $19,500. This is the total of your standard deduction ($11,900), your exemption ($3,800), and your spouse's exemption ($3,800). Mail your return by April 15, Mail it to the address shown on the last page of the instructions. 7, , , , , Form 1040EZ (2012) 15

18 Sample Tax Transcript 1040EZ: Hunter Davis This Product Contains Sensitive Taxpayer Data Request Date: Response Date: Tracking Number: XXXXXXXXXXXX Tax Return Transcript SSN Provided: AAA-AA-AAAA Tax Period Ending: Dec. 31, 2012 The following items reflect the amount as shown on the return (PR), and the amount as adjusted (PC), if applicable. They do not show subsequent activity on the account. NAME(S) SHOWN ON RETURN: HUNTER J DAVIS SSN: AAA-AA-AAAA SPOUSE SSN: ADDRESS: 1629 MARKET STREET OKLAHOMA CITY, OK FILING STATUS: Single FORM NUMBER: 1040EZ CYCLE POSTED: RECEIVED DATE: Apr. 15, 2013 REMITTANCE: $0.00 EXEMPTION NUMBER: 0 IDENTITY THEFT PERSONAL ID NUMBER: PREPARER SSN: PREPARER EIN: Income WAGES, SALARIES, TIPS, ETC:... $7, TAXABLE INTEREST INCOME:... $45.00 TAX-EXEMPT INTEREST:... $0.00 UNEMPLOYMENT COMPENSATION:... $0.00 Adjustments to Income ADJUSTED GROSS INCOME:... $7, ADJUSTED GROSS INCOME PER COMPUTER:... $7, DEPENDENT ON ANOTHER TP:... YES FORM 1040EZ DEDUCTION AND EXEMPTION PER COMPUTER:... $0.00 Tax and Credits TAXABLE INCOME:... $1, TAXABLE INCOME PER COMPUTER:... $1, Other Taxes TOTAL TAX LIABILITY TP FIGURES:... $ TOTAL TAX LIABILITY TP FIGURES PER COMPUTER:... $ Payments FEDERAL INCOME TAX WITHHELD:... $ MAKING WORK PAY AND GOV T RET CREDIT:... $0.00 MAKING WORK PAY AND GOV T RET CREDIT PER COMPUTER:... $0.00 MAKING WORK PAY AND GOV T RET CREDIT VERIFIED:... $0.00 EARNED INCOME CREDIT:... $0.00 EARNED INCOME CREDIT PER COMPUTER:... $0.00 EARNED INCOME CREDIT NONTAXABLE COMBAT PAY:... $0.00 SMALL EMPLOYER HEALTH INSURANCE PER COMPUTER:... $0.00 TOTAL PAYMENTS:... $

19 Tracking Number: XXXXXXXXXXXX TOTAL PAYMENTS PER COMPUTER:... $ Refund or Amount Owed REFUND AMOUNT:... $ BAL DUE/OVER PYMT USING TP FIG PER COMPUTER:... $ BAL DUE/OVER PYMT USING COMPUTER FIGURES:... $ FORM 8888 TOTAL REFUND PER COMPUTER:... $0.00 Third Party Designee THIRD PARTY DESIGNEE ID NUMBER:... AUTHORIZATION INDICATOR:... 0 THIRD PARTY DESIGNEE NAME:... This Product Contains Sensitive Taxpayer Data 17

20 Sample IRS Form 1040A: Elizabeth Moore Form Department of the Treasury Internal Revenue Service 1040A U.S. Individual Income Tax Return (99) 2012 Your first name and initial Last name IRS Use Only Do not write or staple in this space. OMB No Your social security number Elizabeth A. Moore BBB BB BBBB If a joint return, spouse s first name and initial Last name Spouse s social security number Home address (number and street). If you have a P.O. box, see instructions. 689 Patterson Road City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Boise, ID Apt. no. Foreign country name Foreign province/state/county Foreign postal code Filing 1 Single status 2 Married filing jointly (even if only one had income) Check only 3 Married filing separately. Enter spouse s SSN above and one box. full name here. Exemptions 6a Yourself. If someone can claim you as a dependent, do not check box 6a. } b Spouse If more than six dependents, see instructions. c Dependents: (1) First name Last name (2) Dependent s social security number Make sure the SSN(s) above and on line 6c are correct. Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. You Spouse 4 Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this child s name here. 5 Qualifying widow(er) with dependent child (see instructions) (3) Dependent s relationship to you (4) if child under age 17 qualifying for child tax credit (see instructions) Boxes checked on 6a and 6b No. of children on 6c who: lived with you did not live with you due to divorce or separation (see instructions) Dependents on 6c not entered above 1 Income Attach Form(s) W-2 here. Also attach Form(s) 1099-R if tax was withheld. If you did not get a W-2, see instructions. Enclose, but do not attach, any payment. Also, please use Form 1040-V. Adjusted gross income d Total number of exemptions claimed. 7 Wages, salaries, tips, etc. Attach Form(s) W a Taxable interest. Attach Schedule B if required. 8a b Tax-exempt interest. Do not include on line 8a. 8b 9a Ordinary dividends. Attach Schedule B if required. 9a b Qualified dividends (see instructions). 9b 10 Capital gain distributions (see instructions) a IRA distributions. 11a 11b Taxable amount (see instructions). 11b 12 a Pensions and annuities. 12a 12b Taxable amount (see instructions). 12b 13 Unemployment compensation and Alaska Permanent Fund dividends a Social security benefits. 14a 14b Taxable amount (see instructions). 14b 15 Add lines 7 through 14b (far right column). This is your total income Educator expenses (see instructions) IRA deduction (see instructions) Student loan interest deduction (see instructions) Tuition and fees. Attach Form Add lines 16 through 19. These are your total adjustments. 20 Add numbers on lines above 1 36, , Subtract line 20 from line 15. This is your adjusted gross income , For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No A Form 1040A (2012) 18

21 Form 1040A (2012) Page 2 Tax, credits, 22 Enter the amount from line 21 (adjusted gross income) , and 23 a Check You were born before January 2, 1948, Blind Total boxes if: { payments Spouse was born before January 2, 1948, Blind } checked 23a b If you are married filing separately and your spouse itemizes Standard deductions, check here 23b Deduction for 24 Enter your standard deduction. 24 5, People who 25 Subtract line 24 from line 22. If line 24 is more than line 22, enter , check any box on line 26 Exemptions. Multiply $3,800 by the number on line 6d. 26 3, a or 23b or who can be 27 Subtract line 26 from line 25. If line 26 is more than line 25, enter -0-. claimed as a This is your taxable income , dependent, see 28 Tax, including any alternative minimum tax (see instructions). 28 3, instructions. 29 Credit for child and dependent care expenses. Attach All others: Single or Form Married filing 30 Credit for the elderly or the disabled. Attach separately, $5,950 Schedule R. 30 Married filing 31 Education credits from Form 8863, line jointly or Qualifying 32 Retirement savings contributions credit. Attach widow(er), $11,900 Form Head of 33 Child tax credit. Attach Schedule 8812, if required. 33 household, $8, Add lines 29 through 33. These are your total credits If you have a qualifying child, attach Schedule EIC. Refund Direct deposit? See instructions and fill in 43b, 43c, and 43d or Form Amount you owe Third party designee Sign here Joint return? See instructions. Keep a copy for your records. Paid preparer use only 35 Subtract line 34 from line 28. If line 34 is more than line 28, enter -0-. This is your total tax. 35 3, Federal income tax withheld from Forms W-2 and , estimated tax payments and amount applied from 2011 return a Earned income credit (EIC). 38a b Nontaxable combat pay election. 38b 39 Additional child tax credit. Attach Schedule American opportunity credit from Form 8863, line Add lines 36, 37, 38a, 39, and 40. These are your total payments If line 41 is more than line 35, subtract line 35 from line 41. This is the amount you overpaid a Amount of line 42 you want refunded to you. If Form 8888 is attached, check here 43a b Routing number c Type: Checking Savings d Account number X X X X X X X X X X X X X X X X X 44 Amount of line 42 you want applied to your 2013 estimated tax Amount you owe. Subtract line 41 from line 35. For details on how to pay, see instructions Estimated tax penalty (see instructions). 46 Do you want to allow another person to discuss this return with the IRS (see instructions)? Yes. Complete the following. No Designee s name X X X X X X X X X Phone no. Personal identification number (PIN) 3, Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I received during the tax year. Declaration of preparer (other than the taxpayer) is based on all information of which the preparer has any knowledge. Your signature Date Your occupation Daytime phone number 2/4/2013 Account Counselor (555) Spouse s signature. If a joint return, both must sign. Date Spouse s occupation If the IRS sent you an Identity Protection PIN, enter it here (see inst.) Print/type preparer's name Preparer s signature Date Check if PTIN self-employed Firm's name Firm's EIN Firm's address Phone no. Form 1040A (2012) 19

22 Sample Tax Transcript 1040A: Elizabeth Moore This Product Contains Sensitive Taxpayer Data Request Date: Response Date: Tracking Number: XXXXXXXXXXXX Tax Return Transcript SSN Provided: BBB-BB-BBBB Tax Period Ending: Dec. 31, 2012 The following items reflect the amount as shown on the return (PR), and the amount as adjusted (PC), if applicable. They do not show subsequent activity on the account. NAME(S) SHOWN ON RETURN: ELIZABETH A MOORE ADDRESS: 689 PATTERSON BOISE, ID SSN: BBB-BB-BBBB SPOUSE SSN: 6d 7 8b 11a-11b 12a-12b 17 FILING STATUS: SINGLE FORM NUMBER: 1040A CYCLE POSTED: RECEIVED DATE: Apr. 15, 2013 REMITTANCE: $0.00 EXEMPTION NUMBER: 1 DEPENDENT 1 NAME CTRL: DEPENDENT 1 SSN: DEPENDENT 2 NAME CTRL: DEPENDENT 2 SSN: DEPENDENT 3 NAME CTRL: DEPENDENT 3 SSN: DEPENDENT 4 NAME CTRL: DEPENDENT 4 SSN: IDENTITY THEFT PERSONAL ID NUMBER: PREPARER SSN: XXXXX PREPARER EIN: XX-XXXX Income WAGES, SALARIES, TIPS, ETC:... $36, TAXABLE INTEREST INCOME:... $0.00 TAX-EXEMPT INTEREST:... $0.00 ORDINARY DIVIDEND INCOME: SCH B:... $ QUALIFIED DIVIDENDS:... $0.00 CAPITAL GAIN OR LOSS: SCHEDULE D:... $0.00 CAPITAL GAINS OR LOSS: SCHEDULE D PER COMPUTER:... $0.00 TOTAL IRA DISTRIBUTIONS:... $0.00 TAXABLE IRA DISTRIBUTIONS:... $0.00 TOTAL PENSIONS AND ANNUITIES:... $0.00 TAXABLE PENSION/ANNUITY AMOUNT:... $0.00 UNEMPLOYMENT COMPENSATION:... $0.00 TOTAL SOCIAL SECURITY BENEFITS:... $0.00 TAXABLE SOCIAL SECURITY BENEFITS:... $0.00 TAXABLE SOCIAL SECURITY BENEFITS PER COMPUTER:... $0.00 SCH EIC DISQUALIFIED INC COMPUTER:... $0.00 TOTAL INCOME:... $36, TOTAL INCOME PER COMPUTER:... $36, Adjustments to Income EDUCATOR EXPENSES:... $0.00 EDUCATOR EXPENSES PER COMPUTER:... $0.00 EARLY WITHDRAWAL OF SAVINGS PENALTY:... $0.00 IRA DEDUCTION:... $0.00 IRA DEDUCTION PER COMPUTER:... $

23 Tracking Number: XXXXXXXXX STUDENT LOAN INTEREST DEDUCTION:... $0.00 STUDENT LOAN INTEREST DEDUCTION PER COMPUTER:... $0.00 TUITION AND FEES DEDUCTION:... $0.00 TUITION AND FEES DEDUCTION PER COMPUTER:... $0.00 JURY DUTY PAY DEDUCTION:... $0.00 TOTAL ADJUSTMENTS:... $0.00 TOTAL ADJUSTMENTS PER COMPUTER:... $0.00 ADJUSTED GROSS INCOME:... $36, ADJUSTED GROSS INCOME PER COMPUTER:... $36, OR-OVER:... NO BLIND:... NO SPOUSE 65-OR-OVER:... NO SPOUSE BLIND:... NO EXEMPTION AMOUNT PER COMPUTER:... $3, TAXABLE INCOME:... $27, TAXABLE INCOME PER COMPUTER:... $27, TENTATIVE TAX:... $3, TENTATIVE TAX PER COMPUTER:... $3, CHILD & DEPENDENT CARE CREDIT:... $0.00 CHILD & DEPENDENT CARE CREDIT PER COMPUTER:... $0.00 CREDIT FOR ELDERLY AND DISABLED:... $0.00 CREDIT FOR ELDERLY AND DISABLED PER COMPUTER:... $0.00 EDUCATION CREDIT:... $0.00 EDUCATION CREDIT PER COMPUTER:... $0.00 GROSS EDUCATION CREDIT PER COMPUTER:... $0.00 RETIREMENT SAVINGS CNTRB CREDIT:... $0.00 RETIREMENT SAVINGS CNTRB CREDIT PER COMPUTER:... $0.00 PRIM RET SAV CNTRB: F8880 LN6A:... $0.00 SEC RET SAV CNTRB: F8880 LN6B:... $0.00 CHILD TAX CREDIT:... $0.00 CHILD TAX CREDIT PER COMPUTER:... $0.00 ADOPTION CREDIT: F8839:... $0.00 ADOPTION CREDIT PER COMPUTER:... $0.00 TOTAL CREDITS:... $0.00 TOTAL CREDITS PER COMPUTER:... $0.00 ADVANCED EARNED INCOME CREDIT:... $0.00 TOTAL TAX LIABILITY TP FIGURES:... $3, TOTAL TAX LIABILITY TP FIGURES PER COMPUTER:... $3, FEDERAL INCOME TAX WITHHELD:... $3, ESTIMATED TAX PAYMENTS:... $0.00 MAKING WORK PAY AND GOV T RET CREDIT:... $0.00 MAKING WORK PAY AND GOV T RET CREDIT PER COMPUTER:... $0.00 MAKING WORK PAY AND GOV T RET CREDIT VERIFIED:... $0.00 REFUNDABLE EDUCATION CREDIT:... $0.00 REFUNDABLE EDUCATION CREDIT PER COMPUTER:... $0.00 REFUNDABLE EDUCATION CREDIT VERIFIED:... $0.00 EARNED INCOME CREDIT:... $0.00 EARNED INCOME CREDIT PER COMPUTER:... $0.00 EARNED INCOME CREDIT NONTAXABLE COMBAT PAY:... $0.00 SCHEDULE M NONTAXABLE COMBAT PAY:... $0.00 SCHEDULE 8812 NONTAXABLE COMBAT PAY:... $0.00 SCHEDULE 8812 TOT SS/MEDICARE WITHHELD:... $0.00 SCHEDULE 8812 ADDITIONAL CHILD TAX CREDIT:... $0.00 SCHEDULE 8812 ADDITIONAL CHILD TAX CREDIT PER COMPUTER:... $0.00 SCHEDULE 8812 ADDITIONAL CHILD TAX CREDIT VERIFED:... $0.00 SMALL EMPLOYER HEALTH INSURANCE PER COMPUTER:... $0.00 TOTAL PAYMENTS:... $3, TOTAL PAYMENTS PER COMPUTER:... $3,

24 Tracking Number: XXXXXXXXXXXX REFUND AMOUNT:... $ APPLIED TO NEXT YEAR S ESTIMATED TAX:... $0.00 ESTIMATED TAX PENALTY:... $0.00 BAL DUE/OVER PYMT USING TP FIG PER COMPUTER:... $ BAL DUE/OVER PYMT USING COMPUTER FIGURES:... $ FORM 8888 TOTAL REFUND PER COMPUTER:... $0.00 THIRD PARTY DESIGNEE ID NUMBER:... AUTHORIZATION INDICATOR:... 0 THIRD PARTY DESIGNEE NAME:... Form 8863 Education Credits (Hope and Lifetime Learning Credits) PART III ALLOWABLE EDUCATION CREDITS GROSS EDUCATION CR PER COMPUTER:... $0.00 TOTAL EDUCATION CREDIT AMOUNT:... $0.00 TOTAL EDUCATION CREDIT AMOUNT PER COMPUTER:... $0.00 This Product Contains Sensitive Taxpayer Data 22

25 Sample IRS Form 1040: Ethan and Miranda James Form 1040 Department of the Treasury Internal Revenue Service (99) OMB No U.S. Individual Income Tax Return 2012 IRS Use Only Do not write or staple in this space. For the year Jan. 1 Dec. 31, 2012, or other tax year beginning, 2012, ending, 20 See separate instructions. Your first name and initial Last name Your social security number Ethan L James CCC CC CCCC If a joint return, spouse s first name and initial Last name Spouse s social security number Miranda R James DDD DD DDDD Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Make sure the SSN(s) above 123 Broken Arrow and on line 6c are correct. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Anaheim, CA Presidential Election Campaign Check here if you, or your spouse if filing Foreign country name Foreign province/state/county Foreign postal code jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. You Spouse 1 Single 4 Head of household (with qualifying person). (See instructions.) If Filing Status 2 Married filing jointly (even if only one had income) the qualifying person is a child but not your dependent, enter this Check only one 3 Married filing separately. Enter spouse s SSN above child s name here. box. and full name here. 5 Qualifying widow(er) with dependent child 6a Yourself. If someone can claim you as a dependent, do not check box 6a..... Boxes checked Exemptions } on 6a and 6b b Spouse No. of children 2 c Dependents: (2) Dependent s (3) Dependent s (4) if child under age 17 on 6c who: (1) First name Last name social security number relationship to you qualifying for child tax credit lived with you 1 (see instructions) did not live with you due to divorce Bryan James EEE EE EEEE Son or separation If more than four (see instructions) dependents, see instructions and Dependents on 6c not entered above check here Add numbers on d Total number of exemptions claimed lines above 3 Income 7 Wages, salaries, tips, etc. Attach Form(s) W , a Taxable interest. Attach Schedule B if required a b Tax-exempt interest. Do not include on line 8a... 8b Attach Form(s) 9 a Ordinary dividends. Attach Schedule B if required a W-2 here. Also attach Forms b Qualified dividends b W-2G and 10 Taxable refunds, credits, or offsets of state and local income taxes R if tax 11 Alimony received was withheld. 12 Business income or (loss). Attach Schedule C or C-EZ Capital gain or (loss). Attach Schedule D if required. If not required, check here 13 If you did not 14 Other gains or (losses). Attach Form get a W-2, see instructions. 15 a IRA distributions. 15a b Taxable amount... 15b 4, a Pensions and annuities 16a b Taxable amount... 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 Enclose, but do 18 Farm income or (loss). Attach Schedule F not attach, any payment. Also, 19 Unemployment compensation , please use 20 a Social security benefits 20a b Taxable amount... 20b Form 1040-V. 21 Other income. List type and amount Combine the amounts in the far right column for lines 7 through 21. This is your total income 22 45, Educator expenses Adjusted 24 Certain business expenses of reservists, performing artists, and Gross fee-basis government officials. Attach Form 2106 or 2106-EZ 24 Income 25 Health savings account deduction. Attach Form Moving expenses. Attach Form Deductible part of self-employment tax. Attach Schedule SE Self-employed SEP, SIMPLE, and qualified plans Self-employed health insurance deduction Penalty on early withdrawal of savings a Alimony paid b Recipient s SSN 31a 32 IRA deduction Student loan interest deduction Tuition and fees. Attach Form Domestic production activities deduction. Attach Form Add lines 23 through Subtract line 36 from line 22. This is your adjusted gross income , For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No B Form 1040 (2012) 23