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<HTML>
<CENTER><H2>AARP tax aide topics
</H2></CENTER>
<p></p>
<DIV ALIGN=center><TABLE WIDTH="80%" BORDER=1 >
<TR ALIGN="center"><TD ><B>BASICS</B></TD><TD >.</TD><TD >.</TD><TD >.</TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#ssnm">SS card & NM license</A></TD><TD ><A HREF = "#interview">Interview</A></TD><TD ><A HREF = "#scope">Scope</A></TD><TD ><A HREF = "#pin">IRS PINs</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#aca">1095-A and 1095-B</A></TD><TD ><A HREF = "#qss">Filing QSS</A></TD><TD ><A HREF = "#spouse-death">Spouse death</A></TD><TD ><A HREF = "#depend">Dependents</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#claim-depend">Claimed as dependent</A></TD><TD ><A HREF = "#efile">E filing</A></TD><TD ><A HREF = "#older">Older years</A></TD><TD ><A HREF = "#estimate">Estimated payments</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#print">Printing</A></TD><TD ><A HREF = "#fedchange">Changes federal in 2025</A></TD><TD ><A HREF = "#nmchange">Changes NM in 2025</A></TD><TD >.</TD></TR>
<TR ALIGN="center"><TD ><B>INCOME</B></TD><TD >.</TD><TD >.</TD><TD >.</TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#ss">SS income</A></TD><TD ><A HREF = "#zero">Zero income</A></TD><TD ><A HREF = "#ein">EINs and TINs</A></TD><TD ><A HREF = "#w-2">W-2 form</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#overtime">Overtime</A></TD><TD ><A HREF = "#staterefund">State tax refund</A></TD><TD ><A HREF = "#int">1099-INT</A></TD><TD ><A HREF = "#savebond">Savings bonds</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#oid">1099-OID</A></TD><TD ><A HREF = "#retire">1099-R</A></TD><TD ><A HREF = "#rmdqcd">RMD from IRA w/ QCD</A></TD><TD ><A HREF = "#brokerage">1099-B brokerage</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#foreign">Foreign tax</A></TD><TD ><A HREF = "#k-1">1099 K-1</A></TD><TD ><A HREF = "#gambling">Gambling gains/losses</A></TD><TD ><A HREF = "#jury">Jury duty</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#529edu">1099-Q 529 education save</A></TD><TD >.</TD><TD >.</TD><TD >.</TD></TR>
<TR ALIGN="center"><TD ><B>DEDUCT & CREDIT</B></TD><TD > .</TD><TD >.</TD><TD >.</TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#educator">Educator</A></TD><TD ><A HREF = "#medical">Medical</A></TD><TD ><A HREF = "#1095c">1095-C form</A></TD><TD ><A HREF = "#hsa">HSA med accounts</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#property">Property tax</A></TD><TD ><A HREF = "#rent">Rent deduction</A></TD><TD ><A HREF = "#std-vs-item">Standard vs itemized</A></TD><TD ><A HREF = "#eic">EIC credit</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#state-refund">NM refund previous year</A></TD><TD ><A HREF = "#energy">Energy credit</A></TD><TD ><A HREF = "#ssi-snap">SSI and SNAP</A></TD><TD ><A HREF = "#self-employ">Self-employ 1099-NEC & 1099-K</A></TD></TR>
<TR ALIGN="center"><TD ><A HREF = "#education">Education credit</A></TD><TD ><A HREF = "#student-loan">Student loan interest</A></TD><TD ><A HREF = "#trump">Trump account</A></TD><TD >
</TD></TR></TABLE></DIV>
<p></p>
<HR>
<HR>
<H3>Basics
</H3>
<HR>
<HR>
<p></p>
<H4><A NAME = "ssnm"></A>* SS card and NM license or ID
</H4>
<PRE>Required to have SS cards for all people listed on tax form:
self, spouse (if filing jointly), dependents
only exception is if have a SSA-1099 with the SS # on it
CANNOT just use last years form, could be fraud
</PRE>
<PRE>Required to have NM license or ID for state form
maybe just if requesting refund?
CANNOT be expired
</PRE>
<PRE>if client says they filed thru AARP before
but their SS does not show up in system
then either I entered SS# incorrectly
of they did not choose last year for AARP to retain their info
</PRE>
<HR>
<H4><A NAME = "interview"></A>* Interview
</H4>
<PRE>Always have them fill out first (yellowed) page
</PRE>
<PRE>Always ask if someone else can claim them as dependent
</PRE>
<PRE>Ask on various forms of income
make a slash mark on form if not relevant
SSI = supplemental security income of disability benefits
no form, but should have a letter
these benefits are not federal taxable, but need to be entered on state
if received state tax refund for previous year AND if itemized in previous year
then will need to claim it as income this year (maybe only portion taxable)
</PRE>
<PRE>Ask on various deductions or credits
make a slash mark on form if not relevant
particularly ones relevant for state
prop tax or rent
child care
medical over 28K or assisted living fraction
armed forces retirement
public school teacher supplies
</PRE>
<PRE>Ask on ACA health insurance - should have 1095-A form if yes
</PRE>
<PRE>Ask on IRS Identity Protection number (IP PIN) - 6 digits
efile will fail if exists but not entered
</PRE>
<PRE>Initial pre-check of tax forms and intake forms
check the YEAR on all tax forms to ensure they are not old forms
could use a highlighter pen to mark important parts of forms
</PRE>
<PRE>Ask on disability and blindness if seems relevant - check boxes on yellow form
blindness has checkbox in TS on page with taxpayers personal info
gives them a larger standard deduction
disability is nowhere in TS, does not affect their tax filing
but is tracked on next-to-last page as part of personal Qs
probably so that AARP can track assitance to disabled
</PRE>
<PRE>Making notes:
WRITE clearly for reviewer to read
make notes on paper about fed/state tax withheld
to ensure they are accounted for in final PDF for tax returns
make notes for anything else for me to remember at end
make Notes on intake form about Qs to address by me or reviewer
basically make a note for anything to help reviewer
</PRE>
<HR>
<H4><A NAME = "scope"></A>* Scope
</H4>
<PRE>NOTE: ask check how he figures out-of-scope so quickly
</PRE>
<PRE>Out of scope cases:
</PRE>
<PRE>Cannot do married filing separately returns - b/c NM is complex
Cannot do military returns
Receiving digital assets (crypto)
Cannot do K-1, for 1065, if Box 1 is non-zero (gain or loss)
</PRE>
<HR>
<H4><A NAME = "pin"></A>* IRS PINs
</H4>
<PRE>ask EVERYONE about this, since it is becoming more common
</PRE>
<PRE>if they have an IRS PIN, make sure to enter it in Basic Info section
else federal submission will bounce
emphasize to them, they need to get a new PIN each year from on-line account
</PRE>
<P>only the client can lookup/provide the PIN
either has a letter from IRS
or login to their IRS account to see it
or can contact IRS by phone
</P>
<HR>
<H4><A NAME = "aca"></A>* 1095-A form for ACA insurance and 1095-B form
</H4>
<PRE>ask EVERYONE about ACA insurance - if have it, should have 1095-A form
will need to enter info from it, if answer yes to health ins from ACA
</PRE>
<PRE>1095-B form is from employer to verify the person has health insurance
not needed for TaxSlayer or tax forms
but could be needed by individual to verify they are not subject
to ACA penalties
</PRE>
<HR>
<H4><A NAME = "qss"></A>* Filing as a QSS = qualified surviving spouse
</H4>
<PRE>can be done for a couple years after a spouse passes away
but REQUIRES there be a dependent child (possibly other kinds of dependents)
TaxSlayer has a Filing Status Wizard option to help with this
</PRE>
<HR>
<H4><A NAME = "spouse-death"></A>* Filing in year of spouse death
</H4>
<PRE>in year the spouse died, must include a death certificate when efile
if have to go home for it, make an electronic NOTE,
so we do not try to Efile until they bring one in
</PRE>
<HR>
<H4><A NAME = "depend"></A>* Dependents
</H4>
<PRE>Child in prison does not qualify as dependent
b/c govt is providing majority of cost for their care
</PRE>
<PRE>Difference between a dependent child and a qualifying dependent
don't really understand this - Laura explained but it is complicated
</PRE>
<PRE>What if a dependent child has substantial income, e.g. more than $5050/year
does not disqualify as a dependent so long as parent providing > half-support
Q: can child be filing their own tax return, e.g. to get taxes refunded?
not sure, but I don't think they can claim self as a dependent
</PRE>
<PRE>Calculation for half support
S = sum of parents income P and child's income C
for P, this inlcudes full SS (even is some not taxable) and other income
for C, includes a job and SS survivor benefits, etc
but NOT SSI support for child, at least for federal tax purposes
H = half of S = support needed for the child (2 people in house)
if C < half of H, then parent is providing > half-support for child
said anohter way, P needs to be 3x or more of C
</PRE>
<PRE>example 1: P = 50K, C = 10K, H = 30K
parent is providing 20K for child's support which is more than half of 30K
example 2: P = 50K, C = 20K, H = 35K
parent is providing only 15K for child's support which is less than half of 35K
</PRE>
<PRE>If child filed taxes, that is OK (e.g. to get refund of withheld tax),
but MUST have checked box saying Someone else can claims you as a dependent,
else cannot be claimed as dependent by parent
</PRE>
<HR>
<H4><A NAME = "claim-depend"></A>* Claimed as dependent
</H4>
<PRE>if someone can claim client as a dependent
find box to check for Someone can claim You as a Dependent
this will mean the client only gets a small deduction, not large standard one
exceptions (don't check the box) if person who could claim them:
is not required to file a return
they do not file a return or file only to claim refund of withheld taxes
</PRE>
<HR>
<H4><A NAME = "efile"></A>* Efiling choices
</H4>
<PRE>When efile: need to choose federal/state mode of filing and payment
ALWAYS choose EFILE option, unless tax payer needs to add a death certificate
for a reecently deceased spouse - then choose paper file,
and reviewer will print 2 copies of forms: one for client to mail, other to keep
If client received refund, can choose bank account or check mailed to them
If client owes tax (including zero), can choose bank debit or mail them a check
If owes $$, can choose future date for bank debit, or can physically mail
check (with a voucher form we give them) anytime before deadline
</PRE>
<PRE>if state tax is zero, choose Efile - mail check
</PRE>
<PRE>in TY 2025, federal refunds must be by direct deposit
some exceptions are allowed
think AARP can file without, but taxpayer will get a letter
</PRE>
<PRE>maling in a return by taxpayer
if no tax owed, mail to Austin
if check included, mail to Louisville
</PRE>
<HR>
<H4><A NAME = "older"></A>* Older year taxes
</H4>
<PRE> do them before this year, so that this-year forms will auto-populate
next year I should be able to do 2025 and 2024, but not earlier
do this by selecting TY 2024 in PRO menu
</PRE>
<HR>
<H4><A NAME = "estimate"></A>* Estimated payments
</H4>
<PRE>client needs to have records of having made these payments (e.g. checks)
enter these payments for tax year: both federal and state on federal form
future payments (for next year): enter federal on federal form
enter state on state form
this will print vouchers for client to use in coming year
</PRE>
<PRE>estimated taxes
if paid this year, can print them vouchers for next year
likewise if way underpaid this year, offer vouchers for next year
tax year payments for federal/state are BOTH under federal
next year vouchers to print are under federal AND state
</PRE>
<HR>
<H4><A NAME = "print"></A>* Printing
</H4>
<PRE>I can print directly for a one-page form like "Itemized Deductions"
or the output of the Colorado form for future year usage
</PRE>
<HR>
<H4><A NAME = "fedchange"></A>* Changes federal in TY 2025
</H4>
<PRE>standard deductions inccreased for everyone in TY 2025
EV purchase credit gone as of 9/30/2025
SALT cap (state and local tax deduction) increases to 40K from 10K
child tax credits went up
1099-K may no longer be taxable
ACA premium tax credits change at end of 2025
taxpayers should be made aware of this
i.e. 1095-A forms may not apply next year
residential energy credits expire at end of 2025
</PRE>
<PRE>enhanced deduction for seniors
$6000 for seniors 65+
can use for standard deducion or when itemize
MAGI income limits for phasing out:
for single,HoH - 75K to 175K
married filing jointly - 150K to 250K
married filing separately - not available
MAGI = certain deductions and tax-exempt income added back
</PRE>
<PRE>no tax on tips rules
must be voluntary, not mandatory tips
e.g. if restaraunt adds 20% for parties of 6+, then not a tip
use Schedule 1-A to calculate/claim
tip income must be listed on a form, e.g. W-2
</PRE>
<PRE>no tax on overtime rules
can deduct the portion of income that is OT pay
not for salaried employees
should be listed on W-2 as OT or OVT
max annual decuction is 12.5K for single, $25K for married jointly
income limits phase out: 150K for single, $300K for married jointly
</PRE>
<PRE>car purchase of EV before 30 Sept 2025
are some restrictions on USA manufacture
</PRE>
<PRE>car loan - can deduct interest for 2025 to 2028
this is found in TaxSlayer under tips/overtime heading
only for new car and for personal use (not business car)
only for an individual
not for a leased car
must be original loan, not refinance
car must have final assembly in US
VIN will specify this, think it means it just start with a number
what need to know is amount of loan interest paid in the tax year
show up on Schedule 1-A in tax return
</PRE>
<PRE>SS fairness payments:
may have received extra SS payments in 2025 b/c includes back pay
term: WEP or GPO or for other reasons
option #1 - include all SSA payments in 2025 income
option #2 - assign back pay to 2024 income
use taxable portion of it to add to 2025 income
to do this will need 2024 tax return
the SS computation can be printed out by TaxSlaer
TaxSlayer can do it both ways, use whatever is less tax
</PRE>
<PRE>NOTE: if a surviging spouse is getting no SS b/c income is too high,
tell them to re-apply b/c law has changed
</PRE>
<HR>
<H4><A NAME = "nmchange"></A>* Changes NM in TY 2025
</H4>
<PRE>deduction for DFAS miliary retiree pay (not active duty)
30K income exclusion from retiree pay, now permanent
surviving spouse now qualifies
</PRE>
<PRE>dedcution for school supplies
stricter definition than federal credit
PIT-ADJ has list of valid supplies, does NOT include computers
this is in addition to federal credit
up to $1000 for each taxpayer and spouse
</PRE>
<PRE>new capped deducution of $2500 from capital gain income
</PRE>
<PRE>new credit for Bern County prop tax
old one: 65+, income below threshold
new one: max of $350 on sliding scae up to 24K income, no age requirement
if tax payer does not live in BC must attach tax bills
which can only be done if file as paper return (not e-file)
NOTE: can lookup a person's property tax on-line if did not bring paperwork
</PRE>
<p></p>
<HR>
<HR>
<H3>Income
</H3>
<HR>
<HR>
<p></p>
<H4><A NAME = "ss"></A>* SS form
</H4>
<PRE>CHECK for fine print that mentions a lump sum payment, possibly for previous year
if so there is an option on TaxSlayer SS section for lump sums
will be asked to enter some info like AGI from previous year tax return
TaxSlayer will do the computation to see if better to claim the lump sum
as part of this year's income or as an adjustment to previous
year's taxes which gets rectified this year
</PRE>
<HR>
<H4><A NAME = "zero"></A>* Zero income except SS
</H4>
<PRE>If federal income is zero (only SS), then add fictitious Income of one dollar
to trigger filing of federal tax forms, this allows state filing as well
do this as Interest Income from Bank of Efile, not Other
</PRE>
<HR>
<H4><A NAME = "ein"></A>* EINs and TINs
</H4>
<PRE>Double check these on carry-forward returns to make sure correct
they can change from year to year
</PRE>
<HR>
<H4><A NAME = "w-2"></A>* W-2 forms
</H4>
<PRE>box 14 is a special case, ask for help if see it
</PRE>
<PRE>PERA line for insurance deduction on a W2
counts as medical deduction
does NOT count as lowered income
</PRE>
<PRE>if there are medical insurance payments, they can be deducted
by a public safety offices (PSO)
they have to be spent on health or accident of long-term care insurance
I think there is a box for that on W-2 form in TaxSlayer
</PRE>
<P>box 14 with ERA or PERA code and W-2 is for a PERA employee
select Retimerment (not in Box 12) - do NOT carry to Form 8880
this is b/c it is a mandatory retirement contribution
</P>
<P>box 12 DD is pre-tax health care contribution by employer,
does NOT qualify for an income deduction
box 14 HLTH Care (or the like) is after-tax health care contribution
DOES quality for an income deduction if itemmize and over 7.5% of income,
TS has a place to enter this when itemizing,
explains the pre-tax or cafeteria plan does NOT qualify
</P>
<HR>
<H4><A NAME = "overtime"></A>* Overtime on W2 form
</H4>
<PRE>will be in box 14 as OVT or V or other overtime indication
info needs to be entered as a deduction
for time-and-a-half, need to enter 1/3 of amount on W-2
this is because it is only the extra "halF" pay that is deductible
</PRE>
<PRE>if W-2 says OT Premuim, it is the full deduction amount
i.e. the half not the full 1.5 pay for the overtime hours
</PRE>
<HR>
<H4><A NAME = "staterefund"></A>* State tax refund
</H4>
<PRE>If got a state tax refund AND itemized last year, then typically
should receive tax form from NM.
also need last year's tax return
</PRE>
<PRE>In TS, there is a state tax refund selection for income,
fill out various boxes with numers from last year's tax return
</PRE>
<HR>
<H4><A NAME = "int"></A>* 1099-INT form
</H4>
<PRE>1099-INT with multiple entries from a single institution
can enter each under one entry, and have TaxSlayer do the summation
</PRE>
<PRE>if have 2 forms from same institueion (e.g. Interest or 1099-B)
enter 2 different names for institution
e.g. append last few digits of account #
this is to make it easier for reviewer to decipher
</PRE>
<PRE>1099 forms with tax-free interest (or dividends?)
in a special box on form
refers to federal tax, but are NOT tax-free for state
so need to enter the same amount again in TaxSlayer beneath the first box
</PRE>
<HR>
<H4><A NAME = "savebond"></A>* Interest and savings bonds, federal vs state issue
</H4>
<PRE>Savings bond interest
taxable on federal, NOT taxable on state
enter amount on 1099-INT in Savings Bond box
right below it, indicate not taxable in state
this will trigger state PIT-ADJ entry in box 9
if instead it is entered on state form as a deduction,
will trigger PIT-ADJ entry in box 7 (same effect, but wrong box)
same idea for T-Bill gains like in my WROS investment account
taxable on federal, NOT taxable on state
</PRE>
<PRE>Converse for federal vs state
some bond interest/div is NOT taxable on federal, but is on state
</PRE>
<PRE>2 places to enter federal int/div which are not taxable for NM
this is besides the savings bond interest
(1) on state form, can enter NM tax-exempt int/div as a deduction
(2) on fed 1099-DIV form (and poassibly INT) can enter a value near the end
for apply no state tax and choose NM
not sure of the difference between them, but show up as
different lines on PIT-ADJ form
</PRE>
<HR>
<H4><A NAME = "oid"></A>* 1099-OID form
</H4>
<PRE>1099-OID - there is a TaxSlayer form for this under Int/Div section
I think idea is that if investment (bonds) were bought at a speical dicount,
then taxes are owed on that discount each year during term of bonds
check 2 things to verity that tax form is IN SCOPE
FATCA filing required box must NOT be checked
no non-zero amount in box 6 for Acquisition Premiiums
one i have seen only had box 1 amount so was in scope
for tax purposes OID amount is treateted like taxable interest
</PRE>
<HR>
<H4><A NAME = "retire"></A>* 1099-R form
</H4>
<PRE>code = 1 for early withdrawal
</PRE>
<PRE>if 1099-R is from OMP = office of manangement personnel
then may not have SS form, even if 65+, b/c OMP payments include it
they also include client's Medicare payments
don't fully understand this, but saw an example in 2026
</PRE>
<PRE>if a 1099 form is from DFAS, ask taxpayer if they are retired military
if so, up to 30K can be deducted on NM state tax
also applies to spouse receiving pension of a deceased military person
</PRE>
<PRE>For annuities
when do I need to use Colordado Simple form
</PRE>
<PRE>(a) if IRA/SEP/SIMPLE box is not checked (for an IRA distribution)
then the distribution is from an annuity
</PRE>
<PRE>(b) if box 2a Taxable Amount is empty or box 2b for not computed is
checked, it means the payer did not compute taxable amount
</PRE>
<PRE>then need to use Simplified Method to compute it
goto Colorado tools calculator, first entry on that webpage
important to know month/year of the "annuity start date"
this is the later of 2 dates:
date of first day of period for which a payment was received
date on which annuity obligations became fixed
other amounts to enter are from tax form
if start date is long ago, there may no longer be a tax-free portion
i.e. full amount is taxable
otherwise it will give an amount to enter as Taxable Amount
can print a version of this for taxpayer to use in future
it lists the amount to reduce taxable portion by each year
</PRE>
<PRE>if health insurance line appears on 1099-R
can be OUTSIDE all the boxes
if can be a deductible medical expense (on fed form, carried to state)
example is PERA, but not always labeled that way
verify it is health insurance, not life insurance
I think idea is that the gross distribution includes the health ins
but the taxpayer never receives those $$
similar to SS gross minus Medicare payments (not received by taxpayer)
maybe health insurance deduction on a W-2 works the same way
but TaxSlayer knows how to interprent codes on W-2
so it uses it as medical expense automatically (like Medicare)
</PRE>
<PRE>what if a 1099-R pension distribution is taxable in another state
e.g. if a state tax withdrawal was paid to another state
ask the client, and look for a state ID that doesn't start with NM
there is a way to handle this, but don't know the details
Robert told me he could show me how to do this
the key idea is that the client wants to have
the state income (from the distribution) to only be taxed once
but it will carry over from federal to NM when we use TaxSlayer
what we cannot do is file a state return for another state,
e.g. to get a refund for the state tax withdrawn by another state
</PRE>
<HR>
<H4><A NAME = "rmdqcd"></A>* RMD from IRA with qualified charitable donation = QCD
</H4>
<PRE>should have paperwork on QCD
idea: reduces income declaration of RMD
there is a place in TaxSlayer to enter this as QCD near the 1099-R forms
</PRE>
<HR>
<H4><A NAME = "brokerage"></A>* 1099-B brokerage form
</H4>
<PRE>if have capital gains/loss, need to find short-term/long-term info to enter
note that 1099-DIV forms can have captital gain entries as well
that kind of capital gains is different
</PRE>
<PRE>even if no cap gain/loss because basis = proceeds
should still enter it into TaxSlayer
</PRE>
<P>if have type X cap gains, is out of scope for us
</P>
<PRE>brokerage statements for 1099-B
one of two places under capital gains heading in TaxSlayer
use SIMPLE form when only proceeds/cost and
no adjustments to cost basis or gains/loss (e.g wash)
this form is further down the list
only use more complex form when additional adjustments (wash, etc)
this form is at the top of the list
</PRE>
<PRE>carry-over capital losses
ask about this for last year if they have brokerage statements with cap gain/loss
otherwise Taxslayer will not know, even if did taxes with us previously
check last year's tax form for Carryover worksheet
it will help fill out losses for this year
if have big losses this year, carrying over to next year
tell them to be aware of this
put note on outer envelope so we will hopefully see it next year
print Carryover worksheet with this year's taxes which shows cap loss
to carry over next year
</PRE>
<PRE>1099-B if one form has both "reported to IRS" and "not reported to IRS"
basis for sold investements, then need to enter it as two
1099-B entries in TS, b/c I think they are treated differently
on schedule D and accompanying form 8949
</PRE>
<PRE>1099-DA = digital asset, could be on a brokerage statement
should apply to selling DA, not receiving
receiving is out of scope
</PRE>
<HR>
<H4><A NAME = "foreign"></A>* Foreign tax over $300
</H4>
<PRE>will only get a federal tax credit of $300 max unless file form 4111
TS allows this (if search for it), but is out-of-scope for AARP
unless preparer is internationally certified
</PRE>
<HR>
<H4><A NAME = "k-1"></A>* 1099 K-1 form for different incomes
</H4>
<PRE>variety of K-1 forms exist
pass-thru of receipients share of income, losses, etc
</PRE>
<PRE>form 1065 for partnerships
if Box 1 is filled (gain or loss) then is OUT of SCOPE
</PRE>
<PRE>form 1041 for estates and trusts
</PRE>
<HR>
<H4><A NAME = "gambling"></A>* Gambling gains/losses
</H4>
<P>should have W-2G form for gains over a few hundred $$
if don't have form, but know the amount, even if less,
then should declare it as income
winnings need to be declared as income even if offset by losses
</P>
<P>for losses, can be claimed as a deduction, but only if itemize
they should keep their own records and show me
should also keep for possible audits
only losses up to the amount of winnings can be deducted
</P>
<HR>
<H4><A NAME = "jury"></A>* Jury duty
</H4>
<P>jury duty entry is under Other Income
</P>
<HR>
<H4><A NAME = "529edu"></A>* 1099-Q form for 529 education savings accounts
</H4>
<PRE>529s are savings accounts to use for children/grandchildren's education costs
run by a state, not federal govt
contributions are deductible from state income in the year they were made
withdrawals are not taxable if used for qualified educations purposes
this is pretty broad, look on-line for what qualifies
a withdrawal is partly the original contribution (basis)
and part gain (by the 529 investement)
if withdrawal is NOT spent in same calendar year, then it is
a taxable distribution
for federal, tax effect has 2 parts
declare the gain as income
pay a 10% penalty on the gain
are some exceptions to the penalty, TaxSlayer explains them
this is out-of-scope for AARP, but can be easily done in TaxSlayer
creates a 5329 form, enters 2 numbers on Schedule 1 and 2
for state, any previously deducted state income must be
declared as income in withdrawal year
this is only for the basis portion
simplest case is that all the basis was previously deducted
if partial, not sure how to do it, probably as a percentage
see NM instructions
the gain portion will carry-over from the federal return
</PRE>
<p></p>
<HR>
<HR>
<H3>Deductions and Credits
</H3>
<HR>
<HR>
<p></p>
<H4><A NAME = "educator"></A>** Educator expenses
</H4>
<PRE>can be entered for both federal and state
$300 max for federal, $1000 for state
see page in Shack Google share doc for details
on who and what qualifies
</PRE>
<HR>
<H4><A NAME = "medical"></A>** Medical expenses
</H4>
<PRE>new for TY 2025, no state medical deductions unless huge
so don't bother to enter them as federal itemized deductions
unless itemize on federal (rare)
only relevant state deduction is for 65+ with out-of-pocket over $28K
there is no income limit on this
</PRE>
<PRE>BUT may come back in some form for TY 2026, so tell clients that
</PRE>
<PRE>percentage received as state deduction depends on income
</PRE>
<PRE>can include all out-or-pocket medical or dental or therapy expenses
nursing home or assisted living fraction
Medicare payments
health insurance premiums, could be on 1099-R in a box or separate labeled line
so make sure they are all included
</PRE>
<HR>
<H4><A NAME = "1095c"></A>** 1095-C form
</H4>
<P>1095-C is health insurance payments by employee for a company plan
is NOT related to an HSA
not generally needed to fill in tax form
</P>
<HR>
<H4><A NAME = "hsa"></A>* HSA medical savings accounts
</H4>
<PRE>HSA within TaxSlayer is in federal Deductions or Credits
</PRE>
<PRE>box 12 on W-2 with W letter is both HSA contributions from employer
AND pre-tax employee contributions thru a cafeteria plan
</PRE>
<PRE>if HSA self-contributions were made separately by employee or a relative
can also enter those in TaxSlayer
total contributions cannot exceed a limit
tax benefits still accrue to the employee
</PRE>
<PRE>form 5498-SA is for HSA contributions, possibly from both employer and employee
but may not be issued until May, too late for taxes
</PRE>
<PRE>form 1099-SA is for HSA distributions
need to verify with client that they were all spent on qualified
health care expenses, otherwise would be taxable income
</PRE>
<HR>
<H4><A NAME = "property"></A>** Property tax deduction
</H4>
<PRE>Prop tax - federal, have to itemize
</PRE>
<PRE>Prop tax - 2 versions on state - ALWAYS enter both places
(1) 16K MGI limit for everyone
(2) 24K MGI limit for Bern and other counties
have to enter these, does not pull from federal itemized
not sure if refundable or not
</PRE>
<PRE>NOTE: state MGI adds SS and other non-taxable federal income
</PRE>
<HR>
<H4><A NAME = "rent"></A>** Rent deduction
</H4>
<PRE>Rent - similar to prop tax
enter it on same page as prop tax
maximum credit is 250, MGI must be < 16000
enter total rent paid for entire year (client + govt),
also indicate if govt assisted
</PRE>
<PRE>is on State property tax deduction form
Enter total rent, even if client only paid part and govt subsidized rent.
Enter rent for the year, not monthly rent
</PRE>
<PRE>Rent credit on state taxes
only number needed is total rent (self + govt)
number is for YEAR, not per month
can be useful to do whether or not received govt assistance, e.g. HUD
</PRE>
<PRE>On state form can get credit for rent paid is income is sufficiently low
enter as property tax under state Deduction section
enter total amount of yearly rent (including any portion govt paid)
and check box if had govt rent assistance (e.g. HUD)
apartments should know amount of total rent
</PRE>
<HR>
<H4><A NAME = "std-vs-item"></A>** Standard vs itemized deduction
</H4>
<PRE>if fill-in itemmized there is a Compare button to see Std vs Item
also a good way to see what Standard is for their filing category
categories for Itemized:
mortgage interest, property tax, state refund, charitable donations
medical expenses over 7.5% of income - think only portion over
7.5% is considered a deduction
only medical expenses auto-fills on state form
</PRE>
<HR>
<H4><A NAME = "eic"></A>** EIC federal credit
</H4>
<PRE>need to have a child, need to have income
amount of EIC goes up with income to a peak, then delines with more income
can be substantial, e.g. thousands of $$
figured out automatically by system
</PRE>
<HR>
<H4><A NAME = "state-refund"></A>** NM tax refund in previous year
</H4>
<PRE>may be taxable on federal, and deducted from NM
but ONLY if itemized deductions in previous year
should get 1099-G tax form from state (probably not, if did not itemize)
TaxSlayer will not know if itemized last year
should be extra income on 1040 line 8 and Schedule A line 1
there is a federal worksheet for how much to enter on Sched A, line 1
may have to do this by hand
idea: if reduction last year did not dip below standard deduction
threshold, then all of it is taxable this year
if partially dipped below, then is pro-rated
should also enter on NM forms, shows up on PIT-ADJ line 21 as deduction
</PRE>
<HR>
<H4><A NAME = "energy"></A>** Energy credit
</H4>
<PRE>on federal is only for windows, furnaces, AC, insulation, possibly water heaters
need a receipt that shows itemized amount (not including other work)
and verification from company that the material qualifies (hi quality)
</PRE>
<PRE>Purchase of wood burning stove can get energy credit b/c if is a biomass stove
is this federal or state credit ? - federal I believe
</PRE>
<HR>
<H4><A NAME = "ssi-snap"></A>** SSI and SNAP benefits
</H4>
<PRE>need to enter extra govt assistance on state forms
</PRE>
<PRE>If disabled person or dependent gets SSI, won't have SSA-1099 statement
but should have letter about amount of assistance received
is NOT federal taxable income
but MUST BE enerterd as Extra Income on state form, under credits (TANF, etc)
which may reduce their state credits (e.g. for rent)
</PRE>
<PRE>SNAP food benefits - do not count as income
these do NOT need to be included as extra state income on the
TaxSlayer credits page - unlike SSI benefits
</PRE>
<HR>
<H4><A NAME = "self-employ"></A>** Self-employment forms are 1099-NEC and 1099-K
</H4>
<PRE>1099-NEC is for nonemployee compensation
choose business not farm
can deduct legit out-of-pocket business expenses
they will be subtracted from taxable income
examples
car mileage (at work, not commuting)
if they pickup supplies on long drive to work, then is work mileage
construction contractor paying for licensing class or filing fee
for umpire who did games in AZ, could deduct mileage to/from AZ
</PRE>
<PRE>1099-NEC is work as a contractor (non-employee) for a company
the company is required to create/send that form if
income is more than $600
</PRE>
<PRE>e.g. Uber driver or Uber eats or gig worker
can be tricky, ask for help if necessary
</PRE>
<HR>
<H4><A NAME = "education"></A>** Education credits
</H4>
<PRE>both federal - AC?? and Learning for Life
not clear what qualifies, e.g. a real-estate class ?
always need EIN ?
1098-S is that the form? don't always have it
is it refundable or non-refundable ?
</PRE>
<HR>
<H4><A NAME = "student-loan"></A>** Student loan interest
</H4>
<PRE>interest paid on all loans for higher education are deductible
also true for dependent's loans
this is for federal forms
look under Deductible section in TaxSlayer
</PRE>
<HR>
<H4><A NAME = "trump"></A>** Trump account
</H4>
<PRE>forms for this are at end of federal in Extra Forms section
</PRE>
<PRE>requires a valid email addresses on both 4547 page and on the E-file page
to make this happen, need taxpayer email address in all 3 of these places:
Trump account 4547 form
basic info page
Erile page
</PRE>
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