Errata/Updates - February 5, 2024 revision
2023 Duck Book Errata/Updates – February 5, 2024 revision
Pg 1 – AARP Tax-Aide Program, 3rd bullet, new shortcut to CA Google Drive: tiny.cc/ca-ref
Determining if a Return Should be Prepared
Pg 11 – Determining If a Return Should Be Prepared, final subbullets, change $2,300 to $2,500 (twice).
Pg 15 – 3rd bullet, replace last sentence with:
“If the taxpayers wish to make this election, the return is out-of-scope the first year of this election. See Pub 4012 page L-3.1 for more details.”
Pg 15 – 4th main bullet, Married Filing Separately: CA4 will not do MFS returns.
Line 1A – Total Amount From Form(s) W-2
Pg 24 – Substitute W-2, middle of 3rd bullet, remove the sentence beginning “Note: as of the date of this
manual, …”
Pg 29 – 3rd main bullet: “certain excludable difficulty-of-care payments”
Pg 29 – insert 4th main bullet:
- Note: Excludable MWP, whether on a W-2 or not, is considered compensation for the purpose of making an IRA contribution.
Pg 29 – 5th bullet (originally bullet #4, before inserting the line directly above),
the link to the NTTC document is now:
a five-page NTTC document, “Medical Waiver Payments Guide”, in the shared CA-wide REFERENCES folder (tiny.cc/ca-ref) under Additional Reference Documents; that folder also has the 5-test “MWP Worksheet”.
Pg 30 – 2nd bullet, change to say “Otherwise (option (1a) or (2a) …”
Line 1B Through Line 1I – Income on Line 1 Not From a W-2
Pg 32 – before Work Release or Penal Income, insert new section:
Poll Worker Pay not on a W-2
- Don’t report election work as Other Income or on Schedule C (it isn’t a regular means of livelihood). It is considered earned income for purposes of EIC.
- If no W-2 was received, enter the pay on the Enter Household Employee Income page [Income > Other Income > Other Compensation > …]. This results in the compensation being reported as wages (earned income) on Form 1040 Line 1b.
- Only if reported on Form 1099-MISC or 1099-NEC, then also report a 1099-MISC and offset it:
- Enter the 1099-MISC (box 3 amount goes to Sch 1, Line 8z), and
- Enter the same amount in [Deductions > Adjustments > Other Adjustments > Adjustments Not Listed Above] as “1099 RPTD AS WAGES” to offset this 1099 entry (adjustment on Sch 1, Line 24z).
- Create a TaxSlayer note (page 8) explaining “Due to TS limitations, report pollworker pay as household employee income for EIC”.
Pg 32 – Scholarships, Fellowships and Grants, 2nd main bullet, 2nd subbullet, change $2,300 to $2,500.
Then in CA policy subbullet, change $2,300 to $2,500 and add:
So in the Bogart Education Benefits tool (cotaxaide.org/tools/), the “Funding Sources” tab, check the box to “Limit the taxable amount tested by the optimizer tab to”, and enter $2500.
Pg 36 – change “Box 11” to “Box 12”,
change “Box 12” to “Box 13”, and
change “Box 15” to Box 16”.
Pg 38 – Box 7 code, 2nd bullet: delete entire subbullet that begins with “Note”
Pg 38 – Code 6: replace “enter 0 in Box 2a” with “Don’t report on the return.”
Pg 40 – 1099-R Form – Transfer or Rollover, 1st paragraph, replace subbullets 2 and 3 with:
- For code G, if there is an amount in box 2a of the paper Form 1099-R, this may be a wholly or partially taxable rollover from a qualified plan to a Roth account. If the taxpayer confirms that the destination for the transfer was a Roth, enter the taxable amount shown in box 2a of the paper form. If the taxpayer is certain that the destination was a traditional IRA or a non-Roth account in another qualified retirement plan, then box 2a in TaxSlayer should be changed to zero.
- Otherwise, for a code G or code H transfer, box 2a on the paper Form 1099-R should be blank (or zero); in this case, enter zero in box 2a in TaxSlayer.
- Then in the “Rollover or Disability” section of the Form 1099-R page, check the box “Check here if all/part of the distribution was rolled over, and enter the rollover amount”. Then, in the dollar amount box immediately below, enter the box 1 amount as the “rollover amount” (this step shouldn’t really be required, as TaxSlayer seems to do nothing with this).
Line 5 – Pensions and Annuity Income
Pg 44 – 1099-R Form, PSO Exceptions, Health Insurance, change 1st sub-sub bullet:
Pg 44 – 1099-R Form, State Section, change “box 14” to “box 16” throughout the section,
then change “box 12” to “box 14” throughout the section.
Line 6 – Social Security and Railroad Retirement Benefits
Pg 49 – 1st paragraph / subbullet, add:
Note: There is a fee to get a photocopy of a filed return.
Pg 50 – Out-of-scope, 3rd subbullet, change $2,300 to $2,500.
Pg 50 – Summarization, change “M” box to:
“Reporting Multiple Transactions on a Single Row” box.
Pg 51 – Entering Capital Gains and Losses, 1st bullet, change the 1st subbullet:
- Note: The new option (“1099-B Transactions with No Adjustments”) should be used only for covered sales, where the cost basis has been reported to the IRS (type A and D on Form 8949). You may total all covered transactions on multiple 1099-Bs, then enter totals on this screen (but see CA legal note below).
Pg 51 – Date Sold, replace 1st bullet with:
- If multiple transactions are being summarized, then pick one of the sales dates to enter in TaxSlayer.
Pg 52 – Adjustments, main bullet, change “Code M” to:
“Reporting Multiple Transactions on a Single Row”, code M
Pg 52 – Adjustments, 1st sub-subbullet, change “Code W, for a wash sale” to:
“Nondeductible Loss from a Wash Sale”, code W
Pg 54 – (Sale of home continued) – 2nd main bullet on this page, change 2nd subbullet to:
- If an exclusion can be claimed, as discussed above, then select “Exclude Some/All of the Gain from the Sale of Your Main Home” (code H), and enter the exclusion amount as a negative number.
Schedule 1, Line 3 - Business Income
Pg 60 – Schedule C Car and Truck Expenses: 2023 mileage rate is 65.5 cents/mile.
Pg 61 – Other Expenses, Equipment:
- replace “is $2,500 or more” with “exceeds $2,500”, and remove last part of the sentence, beginning with “unless the taxpayer …”
- next subbullet, change “$2,500” to “$2,501”
Simple Schedule K-1 Forms, Including Prepaid Funeral Plans
Pg 62 – change last two bullets to:
- Note: Some brokers now issue a Schedule K-1 for IRAs (Form 1065 Box 12 is checked). Such IRA K-1 forms can be ignored like any IRA statement (and thus any unusual items don’t make the return out-of-scope). You should see that the Partnership’s TIN in Box E is not the taxpayer’s SSN, but the partnership’s EIN, and the Box F name usually includes “IRA” or “CUSTODIAN”.
- If a Schedule K-1 form includes anything other than interest, dividends, royalties, capital gains/losses (incl. Section 1250 gains), estate tax deduction, taxes paid, and associated foreign tax credits, then the return may be out-of-scope. However, a few other items may be disregarded.
- Note: Refer to pp. D-60 thru D-62 of NTTC Pub 4012 online for specifics contrary to the IRS print version.
Schedule 1, Line 8 - Other Income
Pg 66 – Gambling Winnings, replace penultimate bullet and subbullet with:
- New for tax season 2024: If the taxpayer has gambling proceeds to report that are not on a Form W-2G, go to the page [Income > Other Income > Other Compensation > Other Gambling Income not reported on a W-2G] to enter total winnings and any cost of bets placed. This income flows to Schedule 1 Line 8b, the bets to Schedule A.
Pg 67 – Gambling Bets Placed, final bullet, “Note on CA state returns”, add final subbullet:
- However, if the cost of winning lottery ticket(s) was deducted directly from income, as described in the whitepaper in the two preceding paragraphs, then:
- In the State Section go to the Subtractions from Income page, select “California Lottery Winnings”, and enter the net amount of those winnings (minus the cost of winning ticket(s)).
Pg 70 – Other Income Without a Supporting IRS Form, last sentence in this section, delete
“and being a poll worker (election judge, election worker)”
Schedule 1, Line 17 - Self-Employed Health Insurance (SEHI)
Pg 72 - Schedule 1, Line 17 – Self-Employed Health Insurance, under 1st main bullet, insert:
- Note: Health insurance (or LTC) premiums can only be deducted on Schedule C for months when an individual wasn’t eligible to participate in any employer-subsidized health (or LTC) plan.
Line 12 - Standard or Itemized Deduction (Schedule A)
Pg 80 – General Sales Tax, middle of first paragraph: the 2023 rate was 7.25%.
Schedule 3, Line 4 - Retirement Savings Contribution Credit
Pg 96 – 1st paragraph, the Retirement Savings Contribution Credit is available with these AGI limits:
- Single and Married Filing Separately: $36,500
- Head of Household: $54,750
- Married Filing Jointly and Qualifying Surviving Spouse: $73,000
Pg 105 – Renter Credit, 1st bullet, replace 1st sub-sub-bullet with:
- The residence could be a mobile home for which the taxpayer rents the land, or a boat slip if the residence is a boat.
- Note: If the landlord isn’t reporting the rent as income (very common if “renting” from a relative), then it’s not rent but rather “sharing expenses”. In that case, answer “No” in TaxSlayer.
Pg 106 – Renter Credit, #3, replace “shows $0” with “shows $0 tax on net value”.
Pg 107 – after the section Principal/Physical Residence Address, insert stand-alone bullet:
- Answering any remaining CA general-information questions isn’t mandatory (“Do you want information on registering to vote”, “Do you want information on health insurance”, etc.).
Pg 116 – Foster Youth Tax Credit, add final bullet:
- Select State Section > California Return > Credits > CA Earned Income & Foster Youth Credit (Form 3514) > Foster Youth Tax Credit, and answer the questions.
CA Penalties for Lack of Health Insurance
Pg 116 – CA Penalties for Lack of Health Insurance, 2nd bullet, subbullet link has a new shortcut:
tiny.cc/ca-ref
Pg 136 – Prior Year Returns, penultimate bullet on the page,
the CA References Google Drive has a new shortcut: tiny.cc/ca-ref
Pg 140 – 4th bullet from the bottom, change “2022 and later” to “2021 and later”.
Pg 146 – insert: SEHI – Self-Employed Health Insurance
Index
Pg 150 – change Poll Worker Pay to pg 32
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