Massachusetts Update – Week 8

We’re getting down close to the end of season so it’s time for a few reminders.

Counselors and client facilitators who have worked 40 or more hours can submit either an itemized or flat rate ($35) reimbursement request.  All itemized requests MUST be entered via the volunteer portal.

If your counseling mileage exceeds $400, you must submit a pre-approval request before submitting your actual itemized reimbursement request.

No one can submit both an itemized and flat-rate reimbursement request in the same year (fiscal year – 1 Oct – 30 Sep).

Site leaders will need to input their site program metrics – number of paper and amended returns, question and answers, etc – into the portal at the end of the season.  Now is a good time to look through your logs to organize that data.

National released QSRA-2018-01 on March 29,2018 to emphasize the requirement to conduct a thorough Intake/Interview and Quality Review Process.  Please read and heed.


Massachusetts Update – Week 7

Last week didn’t start out well, with the TaxSlayer outage last Monday that affected preparation of state returns. Fortunately, it cleared by Monday afternoon, but we’re well aware of the impact it had at your sites.

Helpful tips of the day (thanks to those sending them in).

  • TaxSlayer does NOT carry forward any federal or state TY2016 refund that was applied to the taxpayer’s TY2017 liability.  You need to enter these manually on the “Payments and Estimates” menu.  See the NTTC version of 4012, page H-32.
  • It’s easy to fall into the trap of “over-itemizing.”  Taxpayers bring in all sorts of information for itemized deductions, but their federal/state income is below the level where it helps them. Always take a look at their income (federal and state) to see if it makes sense to itemize BEFORE you do so (unless they’re required to itemize such as some MFS returns).  They may be disappointed you don’t use the information, but explaining the rationale usually helps.

The end of the season if fast approaching… we’ll have the state wrap-up meeting of District Coordinators the first week of May.  In preparing for that meeting, we’re looking for feedback in two areas:

  • What specific changes would you like to see in TaxSlayer, focusing on Massachusetts returns, for next year?  We’ll be submitting our prioritized recommendations to National in May and we’ll be using the state meeting to finalize the list.  So please send your ideas to your local and/or district coordinators so we have time to prepare and prioritize the list.
  • How can we improve training for next year?  Do we need more practice problems, problems that cover different aspects of tax law, more insight into tax law itself?  Again, please send your ideas to your local and/or district coordinators.

Massachusetts Update – Week 6

It’s hard to believe we’ve wrapped up week 6.

I’d really like to encourage all volunteers to share more.  If you learn something new about tax law or how input something into TaxSlayer — rather than have others re-learn what you know — let’s share it.  You can send any of these tidbits to me by commenting on the blog.  They won’t get published automatically, but I will read them.

For example…..

  • The Massachusetts M-1310 doesn’t print correctly and TaxSlayer says it must be sent in via regular mail, even if e-filing the MA return is possible. TaxSlayer has acknowledged the M-1310 does not print correctly.and has created a ticket to correct it. In the mean time, it is best to paper file the MA return with the M-1310; the person filing the return may have to fill in additional information on the M-1310 to satisfy DOR requirements.
  • If you have a taxpayer filing MFS who doesn’t know their spouse’s SSN — you can enter 111-00-1111 – which will allow you to complete the data entry (see 4012, page B-12).  You won’t be able to efile the return unless you have the correct SSN; if the taxpayer doesn’t know it — he/she will have to paper file the return.

For those who might encounter taxpayers with properties larger than an acre who might be eligible for the circuit breaker — Peter Viles developed some calculators to pro-rate the property tax amounts specifically for the circuit breaker calculation.  You can find the links on the Reference Material page (at the bottom).

Heads up if you have a taxpayer who gets a 1095A (even if they don’t know it).  If you file the return without entering that information — the IRS will send the taxpayer a letter asking them to submit the 1095A and Form 8962 before they release the anticipated refund.  It can take up to 8 weeks after the taxpayer sends in the 1095A and 8962.  So don’t think the taxpayer will get their refund faster — it’s better to submit everything in the initial submission.

We’re seeing more and more letters from the DOR asking taxpayers to verify their identities and/or provide backup information to justify their refunds.  Just a word to the wise.




Massachusetts Update – Week 5

And…..we’re half way through the season.

I hope everyone is up and operating with this crazy weather.  After 2+ hours of snowblowing just today and trying to reschedule three days of appointments because of snow and power outages……I am ready for a break!!

Now that we’re half way through the season, I recommend all EROs check to make sure you have not forgotten to efile any returns (especially state returns).  I like to use the TaxSlayer reports feature and review the Management Reports (Site Production Detail Report) to verify what I thought I sent was what I really sent.

We’re starting to see an uptick in amendments.  One of the frequently asked questions is — for MA returns — how to mark them as amendments.  When you’re navigating through the amendment screens, when you see this – click on the words “Edit Amended” – not the pencil icon.  That will allow you to check the required “amended” box on the MA return.


Massachusetts Update – Week 4

And better late than never!  Power outages are not good for productivity.

You can now complete and file returns with the retroactively reinstated energy credit.  If you’d started the energy worksheet before 2 March you might need to delete that information and re-enter it to ensure it’s current.

In the Massachusetts health care section, the default insurance company EIN is 12-3456789.  You cannot delete that.  Simply overtype the correct EIN in that entry box. Most of the time that works without any problem. If you can’t get the correct EIN in, just enter the company name and subscriber number. If the taxpayer has Medicare, VA, or MassHealth and you don’t need to enter an EIN — ignore the 12-3456789.

TaxSlayer recently posted a message from the Massachusetts DOR on their blog.  You can read it here….but in summary, the DOR converted some refunds intended for direct deposit to paper checks.

The IRS and DOR have started sending out letters – especially those asking taxpayers to verify their identify. You’ll probably start hearing from a lot of taxpayers who are getting letters and wondering what to do. The letters are self-explanatory when you read them.

If a taxpayer did not bring in their 1095A and the return was filed without Form 8962, the IRS will send the taxpayer a letter with explicit instructions on how to correct it. Follow the instructions in the letter and submit only what is requested.



We’re seeing more and more 1099-Ks reporting third party settlement transactions this year and many of you have had questions about them.

Why is this happening?  Starting in TY2017, the Massachusetts DOR lowered the level for reporting third party settlement transactions (e.g., PayPal) to $600 for payees with a Massachusetts address. This is significantly more encompassing than the IRS level of $20,000 per payee and a minimum of 200 transactions. The end result is that we in Massachusetts are seeing more 1099-Ks.

The DOR has answered some frequently asked questions about this new rule here.

Are 1099-Ks in scope?  Yes, they are – within the limits defined in the Tax-Aide Scope Document (available on the One Support Help Center).

How do we handle a 1099-K?  If a taxpayer has a 1099-K, it is important to determine what the income represents. It can be income from a small business, personal property sales (i.e., online garage sale), a simple transfer of funds from one person to another, or any combination thereof.

We recommend the following course of action for each 1099-K presented:

1) Determine if the 1099-K is for a business, sale of personal items, funds transfer or combination of the three. Work with the taxpayer to determine how much is allocated to each of these categories.

2) For that portion that is business related, determine if the business is in scope (see Tax-Aide Scope Document for Schedule C restrictions). Refer taxpayers with out of scope returns to a paid preparer. If it is a small in-scope business, click on the 1099-K link on the TaxSlayer income page (see 4012, page D-13) and create a Schedule C, listing the 1099-K income on the first line. Deduct all business expenses on the appropriate lines as you would for any small business.

3) For that portion that reflects personal property sales where the sales price is not higher than the original purchase price there is no taxable event and the amount can be ignored.

4) For that portion that is for a funds transfer to another party (e.g., repayment for dinner, etc) there is no taxable event and the amount can be ignored.

5) If any portion of the 1099-K is determined not to be a taxable event, you should note the amount and rationale in the taxpayers’ file (using either a TaxSlayer note or including something in writing in the taxpayer’s envelope) – that will help if there are any future questions.

6) Advise the taxpayer it is possible they could get a letter of inquiry from one of the tax agencies and either tell them how to respond or advise them to call us if it happens.

As always, if you have any questions, please forward them through your management chain for resolution.

Email Scam

We have heard about a scam targeting tax preparers (both paid and volunteer).  The scammers send an email supposedly from the tax software company asking preparers to update their personal information.  Do not click on these links!  It’s a phishing scam. These are just like the scams asking you to update your bank information, paypal account, or other financial information. If you do receive such an email, please report it through you management chain.