Examines the basic application and rationale of the federal income tax law and provides training through specific problem assignments. Emphasizes tax preparation for individuals.
Goals, Topics, and Objectives
- Basic Federal Income Tax Formula
a. Determine the amount of tax liability or refund for varying income levels, filing statuses, itemized or standard deductions, and other variables that affect tax liability.
b. Enter information into a Form 1040. - Inclusions and Exclusions of Gross Income
a. Define gross income under the Internal Revenue Code.
b. Enter information into a Form 1040. - Adjusted Gross Income
a. Determine gross income and adjusted gross income.
b. Enter information into a Form 1040. - Deductions
a. Compare itemized deductions to the standard deduction.
b, Complete a Schedule A, and enter information into a Form 1040. - Self-Employment Income and Taxation
a. Determine taxable income for a sole proprietorship.
b. Complete a Schedule C, and enter information into a Form 1040. - Sale of Capital Assets and Business Property
a. Determine tax liability resulting from gains and losses of the sale of business assets.
b. Complete a Form 4797, and enter information into a Form 1040. c. Determine the tax liability resulting from gains and losses of the sale of capital assets.
d. Complete a Schedule D, and enter information into a Form 1040. - Rental Property and Royalties
a. Determine taxable income or loss from rental property and royalties.
b. Complete a Schedule E, and enter information into a Form 1040. - Tax Credits
a. Distinguish between tax credits and tax deductions.
b. Determine eligibility for tax credits.
c. Calculate tax credits.
d. Enter information into a Form 1040. - Withholdings and Payroll Taxes
a. Calculate Income, Social Security, and Medicare tax withholdings.
b. Calculate an employer's unemployment, Social Security, and Medicare tax liability. - Retirement Plans and Deferred Annuities
a. Calculate tax deferability of employer-provided and individual retirement plans.
b. Calculate the tax ramifications of withdrawals from employer-provided and individual retirement plans. - At-Risk and Passive Activity Tax Rules
a. Describe how at-risk and passive activity rules affect the amount of deductible losses from income properties.
b. Calculate the allowable deduction from income properties. - Other Tax Issues
a. Determine the tax liability or deferred gains and losses from like-kind exchanges, involuntary conversions, installment sales, personal resident sales, related party sales, and wash sales.
Assessment and Requirements
Students will be assessed through tests, quizzes, assignments, and/or class participation.