Basic Tax Program: Schedule of Classes

All sessions on Thursdays, 6:30-9:30 p.m. PT.
 Instructor Office Hours: Fridays (starting July 23), 6:30 - 7:30 p.m. PT (see the class syllabus for Zoom details)

During a 10-week course, multiple chapters may be taught. Click on the name of each chapter, below, to display more information. You can also learn more about how to prepare for your first class.

 

Dates, Sessions, and Chapters

July 11, 2024: Orientation (jump to 3:38 in the recording to skip to the main content)
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Description
Week 1, Chapter 2 - Compiling Taxpayer Information

The tax preparer will learn how to collect taxpayer’s information needed to prepare an accurate tax return. This course will give detailed interviewing example questions to understand how to collect the necessary information. Completing an interview to gather taxpayer’s information to understand the taxpayer’s situation to prepare an accurate tax return is an essential step.

Sample questions are provided for each section of the tax return to help the student understand the importance of knowing the “how” to and “why” ask questions to gain the necessary information from the taxpayer.

At the end of this course, the student will be able to do the following:

  • Identify the different segments of Form 1040.
  • Recognize the general items from each section.
  • Understand the information needed to file a correct tax return.
  • Learn sample questions for each section to build interviewing skills.
Week 1, Chapter 3 - Filing Status, Dependents, and Deductions

This chapter reviews who qualifies for the standard deduction, and what circumstances allow taxpayers to claim a higher standard deduction. You will also learn what an exemption is, (even though it has been suspended due to TCJA). Filing status is used to determine filing requirements, standard deduction, correct tax, and taxpayer’s eligibility for certain credits and deductions. If more than one filing status applies to the taxpayer, the tax professional should choose the one that lowers the amount of tax for the taxpayer.

At first glance, filing status seems simple to determine. After all, isn’t it basically whether a person is married, and how married couples want to file their returns? Despite how simple it may seem; it can quickly get complicated. For example, what do you do when more than one filing status applies to a taxpayer? Publication 17 and Publication 501 show us that the correct answer is to choose the status that lowers the amount of tax for the taxpayer the most. It is vital that tax professionals know the answers to questions like this and understand the details of each filing status so they can help their clients to the best of their ability. But don’t worry; this course will help you understand just that.

At the end of this course, the student will be able to do the following:

  • Recognize how to determine the standard deduction.
  • Understand who qualifies for a higher standard deduction.
  • Explain the qualifying child test requirements.
  • Identify the difference between a qualifying child and a qualifying relative.
  • Describe the difference between custodial and noncustodial parents.
  • List the five filing statuses.
  • Recall the requirements for each filing status.
  • Identify the types of income to determine support.
Week 2, Chapter 4 - Income

This course will discuss the Income line on Form 1040. Students will understand where to report each item, the forms associated with each item, and what must be attached to the taxpayer’s tax return. The student should be able to recognize the type of income that must be included as Other Income, as well as how to figure the taxable percentage on social security benefits.


At the end of this course, the student will be able to do the following:

  • Explain “worldwide income”.
  • Understand where to report wages and other compensation.
  • Differentiate earned vs. unearned income.
  • Describe where each box on Form W-2 is reported.
Week 3, Chapter 5 - Adjustments to Income

This intermediate course will discuss the adjustment to income section on Form 1040. Adjustments are expenses that reduce the taxpayer’s total income. Adjustments are also identified as “above the line” tax deductions.

At the end of this lesson, the student will be able to do the following:

  • Understand how an adjustment to income can decrease the taxpayer’s AGI.
  • Explain the differences between tuition and fees deduction and education credits.
  • Define who qualifies for a student loan deduction.
Week 3, Chapter 6 - Other Taxes and Taxpayer Penalties

This session provides an overview of miscellaneous taxes from Form 1040 and reported on Schedule 2 that a taxpayer might be assessed. This includes excess Social Security tax, additional taxes on IRAs, the Alternative Minimum Tax (AMT), and household employment taxes.

At the end of this course, the student will be able to do the following:

  • Understand how to complete Schedule 2 of Form 1040.
  • Explain when a taxpayer must repay the Premium Tax Credit.
  • Understand the taxability of excess Social Security.
  • Identify when a taxpayer must pay an additional tax on IRAs.
  • Explain when to use Schedule H.
Week 4, Chapter 7 - Tax Credits and Payments

This chapter examines how credits are divided into refundable and nonrefundable. Nonrefundable credits cannot be used to offset the recapture of any other credit or to offset taxes other than income tax. The credits must be computed in order of priority to ensure that limitations are properly applied. A refundable tax credit is treated as a payment and can be refunded to the taxpayer by the IRS. Refundable tax credits are used to offset certain taxes that normally are not reduced.

At the end of this course, the student will be able to do the following:

  • Explain how a nonrefundable credit affects the taxpayer’s tax liability.
  • Name the refundable credits.
  • Understand the Earned Income Credit (EIC) qualifications.
  • Understand who qualifies for the additional child tax credit.
  • Know the rules for the refundable portion of the American opportunity credit.
  • Recognize when a dependent qualifies for the Other Dependent Credit (ODC).
Week 5, Chapter 8 - Itemized Deductions

When computing taxable income, personal expenses cannot be claimed as itemized deductions; however, tax rules do allow for some deductions that are essential for daily living. These specific expenses are deductible as itemized deductions. A standard deduction is a set amount that the taxpayer can claim based on his or her filing status. Itemized deductions are shown on the tax return using Schedule A, Itemized Deductions. The taxpayer must decide whether to itemize deductions or use the standard deduction and should choose whichever option is best for their tax situation. Itemized deductions are beneficial if the total amount is higher than the standard deduction.

Upon chapter completion, the student will be able to do the following:

  • Explain which deductions are limited to the 7.5% floor.
  • Identify which deductions are limited to the 2% floor.
  • Recap what ordinary and necessary expenses are reported on Form 2106 for prior year tax returns.
Week 6, Chapter 9 - Schedule C

This course encompasses how the sole proprietor reports income. Sole proprietorship is the most popular business structure. A sole proprietorship is indistinguishable from its owner, and all income earned is reported by the owner. Schedule C is the reporting tool for most sole proprietors. Covered in the course is line by line instruction to complete the Schedule C.

Objectives

At the end of this course, the student will be able to do the following:

  • Identify the differences between accounting periods and accounting methods.
  • Understand the guidelines between an independent contractor and an employee.
  • Explain when to use Schedule C-EZ and when to use Schedule C.
  • Recognize what determines start-up costs.
Week 7, Chapter 10 - Schedule E

Rental income is any payment received for the use or occupation of real estate or personal property. The payment that is received is taxable to the taxpayer and is generally reported on Schedule E. Each Schedule E can report three properties. If the taxpayer has more than three properties, additional Schedule E’s would be used. Schedule E is not used to report personal income and expenses. The taxpayer should not use Schedule E to report renting personal property, that is not a business. To report other income, use Schedule 1, lines 8 • 24b.


Objectives

At the end of this lesson, the student will:

  • Know the types of income reported on Schedule E.
  • Realize the difference between repairs and improvements.
  • Recognize where to find the rental property depreciation chart.
Week 8, Chapter 10 - Schedule D - Capital Gains and Losses

This intermediate course includes how to calculate a short-term and/or long-term gain or loss. The student will understand holding period and what is a capital asset. Almost everything a taxpayer owns and uses for personal or investment purposes is a capital asset. When a capital asset is sold, the difference between the basis in the asset and the amount the item is sold for is either a capital gain or capital loss.

At the end of this course, the student will be able to do the following:

  • Explain the holding periods for different types of property.
  • Understand the difference between short-term and long-term capital gains.
  • Identify capital assets.
  • Determine the basis before selling an asset.
  • Know when the primary residence is excluded from capital gain.
Week 9, Chapter 11 - Schedule F

Income received from the operation of a farm or from rental income from a farm is taxable. Farmers determine their taxable income from farming and related activities by using Schedule F. Profit or loss from farm income is first reported on Schedule F and then “flows” to Form 1040, Schedule 1, line 6. This course covers basic farm income and expenses.

Objectives

At the end of this lesson, the student will:

  • Understand basic farm income.
  • Know when a taxpayer should file Schedule F.
  • Realize that breeding and selling livestock could include domestic animals.
Week 9, Chapter 11 - Depreciation

This course will cover the different types of depreciation. Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for wear and tear, deterioration, or obsolescence of the property. The depreciation period is also called the recovery period because the taxpayer is recovering the cost of their property. When claiming depreciation, remember it is "what is allowed or allowable".

At the end of this course, the student will be able to do the following:

  • Describe when property cannot be depreciated.
  • Recognize when depreciation begins and ends.
  • Identify which method of depreciation to use for the property.
Week 10, Chapter 1 - Ethics and Preparer Penalties

When the taxpayer files a return with refundable credits the tax preparer needs to complete an accurate tax return and complete Form 8867, which is attached to the taxpayer's return. Instruction provided will cover the following refundable credits:

  • Earned Income Credit (EIC).
  • Child Tax Credit (CTC).
  • Additional Child Tax Credit (ACTC).
  • Other Dependent Credit (ODC).
  • American Opportunity Tax Credit (AOTC).

Objectives
At the end of this lesson, the student will:

  • Identify the due diligence requirements of the tax preparer when completing a tax return with refundable credits.
  • Explain what documentation must be maintained by the IRS when preparing refundable credits tax returns.
  • Understand what documents the tax preparer should maintain for their records.
  • Compiling Taxpayer Information.
Week 10, Chapter 12 - Extensions and Amendments

If taxpayers are unable to file their federal individual tax returns by the due date, he or she may be able to qualify for an automatic six-month extension of time to file. The taxpayer can either electronically file or mail Form 4868 to the IRS to file for the extension. If the taxpayer has filed a return and realizes that a mistake was made, he or she would file an amended return by using Form 1040X.

At the end of this course, the student will be able to do the following:

  • Understand when an amendment must be filed.
  • Realize when to use Form 4868.
  • Identify when the installment agreement should be used.
Week 10, Chapter 13 - Electronic Filing

Electronic filing (also referred to as E-File and E-filing) is the process of submitting tax returns over the internet via properly certified tax software. The E-File system has made tax preparation significantly easier, and the IRS notifies software users within 24-48 hours if they accepted or rejected the tax return. E-filing is not available year-round but rather begins sometime in January and ends sometime in October; the IRS determines when exactly e-filing begins and ends each year, and states follow whatever dates the IRS sets. An electronic return originator (ERO) is the individual who originates the electronic submission of the tax return. To file a return electronically, the individual needs to be an Authorized IRS e-File Provider.

At the end of this course, the student will be able to do the following:

  • Understand the different e-filing options.
  • Know which form(s) to use when the taxpayer opts out of e-filing.
  • Identify which forms are unable to be e-Filed.