Volunteer Income Tax Assistance (VITA) program

Scenario : Julia Oakley

Scenario Link :https://www.irs.gov/pub/irs-pdf/f6744.pdf

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VITA Program Eligibility

1. Describe how the client ( Julia Oakley) qualified for VITA in this Scenario

Tax Laws, Regulations, Codifications, and Filing Status

2. Identify the tax laws, regulations, codifications, and filing status as applicable to the scenario.

Include the following:

A. How tax laws, regulations, and codification apply to VITA clients

B. How various filing statuses apply to VITA clients

i) Provide reasoning used in selecting the filing status in the scenario.

C. Two examples of how tax laws, regulations, and the codification are used in the scenario

Types of 1040 Forms and Supporting Schedules

3. Describe 1040 forms and supporting schedules used in the scenario

Taxable and Non-Taxable Income

4. Describe how taxable and non-taxable income was presented to the client in the Scenario.

include the following:

A. Two examples of taxable income in the scenario

B. Two of nontaxable income in the scenario

Deductions versus Credits

5. Describe when deductions and credits were used in the scenario.

A. Provide itemized versus standard deduction examples.

Input Information Directly

6. Describe the importance of inputting information directly from intake sheets and tax documents into VITA tax software for the scenario

Accurate Tax Return

7. Describe the tools and procedures used to make an accurate tax return according to VITA for the scenario

Intake and Review Process

8. Describe the steps of the intake and review process used in the Scenario

Include the following:

A. Differentiate the VITA tax return process from the non-VITA tax return process.

B. Outline the quality review process in detail.

VITA Software

9. Describe how information was entered into VITA tax software In the scenario.

Consider the following:

Value

Accuracy

Speed

Real-time updates to laws, regulations, and the codification

Reporting

Research

Correct Tax Liability

10. Explain how a correct tax liability was obtained using the VITA tax software in the scenario.

Consider the following:

Total Tax line-item amount on Form 1040

Tax tables

Correct input of data

Filing status

Intake sheet validation

Accuracy

11. Provide references and citations

Advanced Scenario 8: Julia Oakley Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes Julia is a data entry clerk, age 26, and single. + Julia has investment income and a consolidated broker's statement. Julia is self-employed delivering groceries for Quick Market on the weekends. She received a Form 1093- MEC and a Form 1099-K. She received additional cash payments of $535. Julia uses the cash method of accounting. She uses business code 492000. Julia provided a statement from the grocery delivery service indicating the fees paid for the year. These fees are considered ordinary and necessary for the grocery delivery business: o $150 for insulated box rental o $50 for vehicle safety inspection (required by Quick Market) o $600 for Quick Market fees Julia also kept receipts for the following out-of-pocket expenses: o $80 for business parking o $300 for speeding ticket o $160 for Julia's lunches Julia's record keeping application shows she has driven a total of 2,500 miles during and between deliveries. o She placed her only vehicle, an SUV, in service on 3/15/2020. The total mileage on her SUV for tax year 2023 was 12,000 miles. Of that, 9,500 miles were personal and commuting miles. Julia will take the standard business mileage rate. Julia is paying off her student loan from 2017, when she completed her undergraduate degree. Julia is working towards her Master of Education degree to start a new career as an Associate Professor. She took a few college courses this year at an accredited college. Julia took an early distribution of $3,000 from her IRA in April. She used $2.400 of the IRA distribution to pay her educational expenses for the current year. If Julia has a refund, she would like it deposited into her checking account