Out of Scope by [line number]:
-  Income from a foreign employer
-  Ministers/Clergy
- [8-9] (See Schedule B resource page)
-  State refund for a tax year other than the immediately preceding one (See exceptions below)
-  Other gains or losses (requires form 4797)
-  Taxpayers using the General rule
-  SIMPLE and SEP IRA distributions EXCEPTION FOR AARP
-  Taxable ROTH (early) distributions
-  Early distributions or excess contributions subject to additional tax
-  Distributions from IRAs to which non-deductible contributions were made (Form 8606) EXCEPTION FOR AARP
-  IRA rollovers that do not meet tax-free requirements
-  Required Minimum Distributions (RMD) not taken EXCEPTION FOR AARP
-  Pension Lump sum distributions (Form 4972) (SSA lump sum distributions are in scope)
-  General Rule was used to figure taxable portion of pensions and/or annuities for past years
-  Foreign retirement arrangements that may need special reporting (Form 8938)
-  Farm income or loss
-  TP is insolvent.
-  Cancellation of debt on Home Mortgages may be OOS for your District or site
Tax Slayer entry:
Federal Section > Income
 Wages and Salaries (W-2):
- W-2 codes
- Employee name mismatch – override a mis-spelled or maiden name.
- Employee address mismatch – override if the address differs. Do not worry about “St” vs “Street”, etc.
- SSN mismatch – the TP must ask for a corrected W-2 form from their employer before filing. DO NOT USE AN INCORRECT SSN.
- TP has an ITIN but the W-2 shows an SSN. An additional field for the SSN will appear. Enter the SSN from the W-2.
- If any automatically filled entries do not match, manually correct them..
- State ID number – dashes are not important and will be removed if entered.
- If there is an entry in box 11, there is a software error that may miscalculate the CO tax. It should carry to the CO pension/annuity subtraction. Verify it does and that it doesn’t increase the subtraction more than it should. If it does the latter, go here to fix.
- If a Medicaid Waiver Payment, see line 21 below. (2014 and later).
- Unreported tip income is normally reported on the W-2 TS entry page. If there is no W-2, then on the Federal Section > Income > Other Taxes > Tax on Unreported Tip Income (Form 4137) TS page.
 Interest: (See Schedule B)
 Dividends: (See Schedule B)
 Taxable State Refunds:
- State refunds are only taxable if used in the previous year as a Schedule A deduction.
- If estimated taxes were paid in this tax year for the previous tax year, any refund amount is pro-rated to the two years.
- The refund to be tested for taxability in this tax year will be less than the amount received from the state.
- The tax paid in this tax year for the preceding tax year is added to the amount paid but decreased by it’s pro-rated refund.
- ⚠ CAUTION : Tax Slayer does not provide this calculation. In this case, use the Refund Calculator.
- The lesser of the two following amounts is taxable.
- The amount that itemized deduction exceeded the standard deduction.
- The amount that the state withholding exceeded the sales tax.
- The amount that itemized deductions exceeded the standard deduction.
- The refunded amount reduced by a taxable amount that is negative.
- Tax Credits that were available but not fully used to reduce tax.
- ⚠ CAUTION : Tax Slayer does not provide the latter 2 calculations. In those cases, use the Refund Calculator.
- If the sales tax figure is unavailable (typical), the IRS provides a web site to calculate the state sales tax for previous years.
- Refunds from other than the previous year are OUT OF SCOPE unless the taxpayer agrees that it is either 100% taxable, or the taxpayer claimed the standard deduction or claimed the sales tax deduction for that year.
- Note that Colorado sales tax TABOR surplus refunds are not a refund of income tax.
 Business Income: (See Schedule C)
 Capital Gain or loss: (See Schedule D)
[15-16] IRA Distributions, Pensions and Annuities:
If taxable amount is not known and there is an entry in box 9b:
Box 7 code notes:
Required Minimum Distributions not taken.
 Rental real estate, royalties, etc: (See Schedule E)
 Unemployment compensation
- Verify the taxpayers health insurance coverage during the period of unemployment (e.g. COBRA?) and who was covered, for ACA purposes.
 Social Security benefits: (See Form SSA-1099)
Tax Slayer entry is in the IRA/Pension Distributions category
|Gambling, bingo, lotteries, etc.||
|Cash Income||Federal Section > Income > Other Income > Other Inc. Not Reported Elsewhere
|Jury Duty Pay||Federal Section > Income > Other Income > Other Inc. Not Reported Elsewhere
|Cancelation of Debt||
|Medicaid Waiver Payments||
After entering a Form 1099-MISC, you will be prompted for its disposition:
- Amount in box 1 (if no depreciation or expense) or 2, prompts for a Schedule E
- Amount in box 3, produces no prompt but is added to the Other Income > Other Inc. Not Reported Elsewhere TS page (1040 line 21).
- Amount in box 7, prompts for a Schedule C . Answer yes unless:
- it is a sporadic activity which purpose is not a business (for example, a hobby or occasional activity).
- it is a payment reported by an agency for care of a family member (unless in that business, then use answer yes to use Schedule C).
- the recipient is a newspaper carrier under age 18.
- ☣ SOFTWARE ERROR – If you don’t choose Sched C, the amount does not go to the 1040 line 21 nor anywhere else! Add it manually to the Other Income > Other Inc. Not Reported Elsewhere TS page (1040 line 21) described as from 1099-MISC.
- All other income boxes are OUT OF SCOPE .