Electronic Filing. TaxWise Online. IRS Training Workbook

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Electronic Filing Online IRS Training Workbook

ELECTR ONIC FILING IRS Training Workbookk 2013 CCH Small Firm Services. All rights reserved. 225 Chastain Meadows Court NW Suite 200 Kennesaw, Georgia 30144 Information in this manuscript is subject to change without notice. Any software described in this manuscript is furnished under a license agreement and may be used or copied only in accordance with the terms of the agreement. CCH Small Firm Services is not engaged in renderingg legal, technical, or other professional services. Use of this manuscript or the information in this publication does not relieve the user of complete responsibility for the operation and functionality of its computers and/or network, for the maintenance e and backup of all user data, or for r the preparation, content, accuracy, and review of all forms. THERE ARE NO WARRANTIES, EXPRESSE ED OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULARR PURPOSE, MADE WITH RESPECT TO THESEE MATERIALS OR ANY OTHER INFORMAT TION PROVIDED TO THE STUDENT. All trademarks are the property of their respective owners.

Table of contents Taking this course... 2 Electronic filing... 3 Objectives... 3 Electronically file a state... 3 Linked... 3 Unlinked... 3 Diagnostics... 4 Running Diagnostics... 4 Electronic filing errors... 5 Warnings... 5 Estimated Entries... 6 Creating e-files... 6 Validation errors... 7 Submit e-files... 9 Lesson review...11 Summary...12 Glossary... 13 Index... 14 1

Taking this course This book contains the information presented in the media versions of the lesson in a readable format. This allows you to follow along with the lesson and take notes. This manual can be used as a teaching resource later. Each lesson includes a video presentation and a manual; all videos are interactive. In order to get credit for the lesson, listen to the recording and answer the questions. There is additional information on SFS University under PrepWise; if you need additional information on preparing a tax return or tax laws please refer to the lessons on Link and Learn. 2

Electronic filing Objectives After completing this lesson, you should be able to: Run diagnostics. Correct e-filing errors. Refresh the diagnostic screen. Describe warnings, estimated entries, and overridden entries. Create e-files for federal and state returns in Online. Submit e-files. Electronically file a state You can prepare and transmit up to nine state returns with each federal return. On the primary form for each e-file state, answer the questionn Do you want to electronically file this return? Answer Yes to this question on each return you want to e-file. Online supports linked and unlinked state returns. Linked With linked state returns, the IRS checks for an accepted federal return before forwarding the state return to the state. If you send the state return as linked, you cannot send it to the CCH Small Firm Services Electronic Filing Center until the IRS accepts the federal return. Unlinked With unlinked state returns, the IRS checks only for schema validation and sends the state return to the state regardless of the status of the federal return. In Online, you can send unlinked state returns at the same time as the federal return. Online defaults all state returns to linked to the federal return. You can change the state e-file to unlinked if you need to file the state return before or without the federal return. To unlink the state return, select the Check here if you want to file this return as unlinked check box on the state form. 3

Diagnostics When you finish and review a return, run Diagnostics.. For returns that you do not e-file, Diagnostics checks for tax inconsistencies, omissions, and overridden and estimated entries. For returns that you e-file, Diagnostics also looks for electronic filing errors and business rule validation errors. The Diagnostics screen is divided into sections: Electronic Filing and Business Rule Validation Errors Warnings Overridden Entries Estimated Entries Note: All sections may not display for every tax return. Running Diagnostics To run diagnostics, use the following steps: 1. Open the return. 2. Click Run Diagnostics. Online reviews the return and displays Diagnostics Results: 4

Electronic filing errors Problems that prevent a return from electronic filing, or electronic filing errors, are listed first in Diagnostics Results. These can be missing or incorrectt information that the IRS requires in the e-file. Make electronic filing errors your first priority. Online displays electronic filing errors as a red link. 3. Click the electronic filing error to navigate to the form containing the error. 4. Correct each electronic filing error. 5. Run Diagnostics again. Online clears the error(s). Warnings Warnings identify possible problems, inconsistencies, or suspicious information in the tax data in the return. Online displays warnings so you can verify information, not to cause alarm. Verify the information questioned in the warning. If it is correct, continue with the return. If the information is incorrect, change the information accordingly. Warnings do not prevent you from electronically filing a return. 6. Review the warnings in the return and correct any as needed. 5

Overridden Entries Online identifies overridden entries as links. Overridden entries to not disqualify a return from electronic filing, but they may result in the incorrect calculation of the tax return. Overridden entries do nott recalculate even if items are added or removed from the return thatt affect the entry. 7. Review the overridden boxes in the return and unoverridee as needed. Estimated Entries Online identifies estimated entries as links inn Diagnostics Results. Althoughh estimated entries do not disqualify a return from electronic filing, they may result in missed reporting information. 8. Review the estimated boxes in the return and complete information as needed. Creating e-files When you review and correct Diagnostics Results, youu can create the e-file. To create the federal and state electronic files, use the following steps: 9. Click Createe e-file(s). 6

Validation errors Validation errors are an additional check on a return before Online creates the e- file. This check determines whether the information inn the return meets the IRS requirements for correct format, or schema. When Online finds a validation error, online displays the error, which includes the box in the tax return that contains the error and an explanation of the error: If Online finds validation errors, correct all validation errors and then attempt to create the e-file again. Online displays validation errors either as a red link or as black text. For help with correcting validation errors, use the Knowledge Library and Online Blog. 7

10. Correct any validation errors. 11. Run Diagnostics again. 12. Click Createe E-Files. Online processes and creates the e-file: 8

Submit e-files To submit e-files in Online, use the followingg steps: 1. Log in to a user who has one of the following roles: Administrator E-File Manager SuperUser 2. Click Submit e-files. Online displays the E-file Report dialog box: 3. Select the check box next to the tax return you want to e-file. 4. Click Continue. 9

Online displays the E-file Report dialog box, where you can confirm your submission. 5. Click Print to print a copy of the report to PDF. 6. Click Continue. Online sends the returns to the CCH Small Firm Services Electronic Filing Center and displays a confirmation of submission. 10

Lesson review 1. How do you show that you want to electronically file a state return? 2. To run Diagnostics in Online, click. 3. When do validation errors occur? 4. Online displays what information in Diagnostics Results? 11

Summary You should now be able to: Run diagnostics. Correct e-filing errors. Refresh the diagnostic screen. Understand warnings, estimated entries and overridden entries. Create e-files for federal and state returns in Online. Submit e-files. 12

e-filed return: an income tax return that is submitted to the IRS electronically Glossary Electronic filing (e-file): a method of sending tax returns to the IRS through an internet connection. Electronic filing identification number (EFIN): an identification number assigned by the IRS to accepted applicants for participation in IRS e-file Electronic return originator (ERO): a person or company who sends a tax return to the IRS Estimated entry: entries that are required for e-filing or that have been marked as incomplete by the preparer Filing status: a designation based on the taxpayer s marital status and other information that affects the availability and amounts of credits, the standard deduction, and tax rates Internal Revenue Service (IRS): a bureau of the U.S. Department of the Treasury that collects tax revenue and processes tax returns IRS rejection: an acknowledgment from the IRS that an income tax return is not acceptable or complete 13

Diagnostics, 4, 11 Report, 4, 5, 6 E-File Submit, 9 Electronic filing, 4, 5, 6 Entry Estimated, 3, 4, 6, 12 Overridden, 3, 6, 12 Estimated Entries, 3, 4, 6, 12 Overridden Entry, 3, 6, 12 Report Diagnostics, 4, 5, 6 Submit E-Files, 9 Index 14