Course Description

Designed to make the practitioner comfortable with “high traffic” issues, this program enables participants to discuss and handle individual tax essentials. The course examines and explains the practical aspects of return preparation and individual planning, bridging the gap between theory and application. Significant new developments are summarized with emphasis on tax savings ideas. Practical applications and illustrations are used to systematically explore tax deferral, reduction, and elimination opportunities accompanying return preparation. For example, the analysis of gross income is discussed together with income splitting techniques; property transactions are examined alongside like-kind exchanges and involuntary conversions. The result is an extraordinary blend of the latest developments affecting individual returns and their related planning ideas.

Learning objectives

• Identify federal revenue tax sources citing the definitive role of gross income and, determine a client’s tax liability using current rates, tables, exemptions, and statutory amounts, and their withholding and/or estimated tax responsibility.
• Specify the various filing statuses and their filing requirements recognizing the advantages and disadvantages of each.
• Determine what constitutes gross income under §61 stating the tax treatment of compensation, fringe benefits, rental income, Social Security benefits, alimony, prizes, and awards, identify dividend and distribution types and their tax differences, and specify how debt discharge can result in taxable income.
• Identify the mechanics of income exclusions such as education-related exclusions, gift and inheritance exclusions, insurance, personal injury awards, interest on state and local obligations, and the foreign earned income exclusion.
• Recognize income tax deductions and their use to reduce tax liability by: Identifying personal, spousal and dependency exemptions and reporting requirements including pre-2005 dependency rules; Specifying the deductibility of §163 interest categories, §162 educational expenses, pre-2018 §217 moving expenses, pre-2018 §165 casualty & theft losses, and §164 taxes stating their proper reporting and substantiation; Determining variables that impact the deductibility of charitable contributions, and identifying qualified organizations, permissible contributions contribution limitations, their tax treatment, and substantiation requirements; Identifying the deductibility of medical care expenses including medical insurance, meals and lodging, transportation, home improvements and lifetime care payments recognizing the impact of Medicare; Specifying deductions that are subject to the pre-2018 2% of AGI limitation, deductions not subject to the 2% limit, and nondeductible expenses.
• Determine distinctions among several types of tax credits identifying the eligibility requirements and citing changes created by recent tax legislation to individual tax returns.
• Recognize the tax treatment of rental property expenses specifying their impact on landlords and tenants taking into consideration the tax differences given to rent, advance payments, and security deposits.
• Identify the application of the hobby loss rules to a business, determine deductible health insurance costs and the requirements of the home-office deduction, and specify self-employment taxes and available business and investment credits.
• Determine how to properly deduct travel and pre-2018 entertainment expenses by: Identifying deductible business travel expenses, a taxpayer’s tax home, if any, and work locations based on the IRS’s definition and recalling the “away from home” requirement and “sleep and/or rest” rule; Specifying the key elements of deductible domestic and foreign business travel costs recognizing the Reg. §1.162 deduction of convention and meeting expenses; Identifying §274 pre-2018 entertainment deductibility tests, determining the limits on home entertaining, ticket purchases, and meals and entertainment stating the eight exceptions to the percentage reduction rule; and Recognizing the substantiation requirements associated with business gifts, employee achievement awards, and sales incentive awards.
• Determine the differences between accountable and nonaccountable plans including the requirements for an accountable plan particularly adequately accounting for travel and other employee business expenses.
• Determine what constitutes local transportation and commuting including how nondeductible personal commuting relates to local business transportation expenses.
• Identify the apportionment of automobile expenses between personal and business use, the actual cost and standard mileage methods, and the gas guzzler tax.
• Specify the various types of excluded fringe benefits that can increase employers’ deductions and incentive-based compensation of employees listing examples of each.
• Recognize the cash, accrual, or other methods of accounting, select available accounting periods specifying their impact on income and expenses, and identify expensing depreciation, and amortization.

Final examination expiration date:

The program participant will have one year from the date of purchase to complete the course and final examination.