Understand the history and objectives of U.S. tax law.
Describe the different entities subject to tax and reporting requirements.
Understand and apply the tax formula for individuals.
Determine filing status and understand the calculation of tax according to filing status.
Calculate the number of exemptions and the exemption amounts for taxpayers.
Calculate the correct standard or itemized deduction amount for taxpayers.
Compute basic capital gains and losses.
Identify the new tax rules for high-income taxpayers.
Access and use various Internet tax resources.
Understand the basics of electronic filing (e-filing).
Understand and apply the definition of gross income.
Identify the tax treatment of interest and dividend income.
Describe the tax treatment of alimony and child support.
Determine when prizes and awards are included in income.
Calculate the taxable and nontaxable portions of annuity payments.
Understand the tax treatment of life insurance proceeds.
Identify the general rules for the tax treatment of gifts and inheritances.
Describe the elements of scholarship income that are excluded from tax.
Understand the general tax treatment of health insurance.
Determine when meals and lodging may be excluded from taxable income.
Understand the tax treatment of municipal bond interest.
Describe the tax treatment of unemployment compensation.
Identify the common employee fringe benefit income exclusions.
Apply the rules governing inclusion of Social Security benefits as income.
Complete a basic Schedule C (Profit or Loss from Business).
Understand the tax treatment of inventories and cost of goods sold.
Identify the requirements for deducting transportation expenses.
Identify the requirements for deducting travel expenses.
Determine the requirements for claiming meals and entertainment deductions.
Identify the requirements for claiming business education expenses.
Identify the tax treatment of dues and subscriptions.
Determine which clothing and uniforms may be treated as tax deductions.
Explain the special limits for business gift deductions.
Explain the tax treatment of bad debt deductions.
Ascertain when a home office deduction may be claimed and how the deduction is computed
Describe the basic tax treatment of deductions for net operating losses.
Apply the factors used to determine whether an activity is a hobby, and understand the tax treatment of hobby losses.
Apply the tax rules for rental property and vacation homes.
Explain the treatment of passive income and losses
Describe the self-employed health insurance deduction.
Understand how Health Savings Accounts (HSAs) can be used for tax-advantaged medical care.
Know the special rules applicable to moving expenses.
Understand the treatment of Individual Retirement Accounts (IRAs), including Roth IRAs.
Explain the general contribution rules for Keogh and Simplified Employee Pension (SEP) plans.
Describe the general rules for qualified retirement plans and 401(k) plans.
Explain the pension plan rollover rules.
Understand the nature and treatment of medical expenses.
Calculate the itemized deduction for taxes.
Apply the rules for an individual taxpayer’s interest deduction.
Determine the charitable contributions deduction.
Compute the deduction for casualty and theft losses.
Identify miscellaneous itemized deductions.
Understand the treatment of employee business expenses.
Understand the tax implications of using educational savings vehicles.
Calculate itemized deduction and exemption phase-outs for high-income tax payers.
Calculate the child tax credit.
Determine the earned income credit (EIC).
Compute the child and dependent care credit for an individual taxpayer.
Apply the special rules applicable to the American Opportunity and lifetime learning credits.
Understand the operation of the foreign tax credit.
Determine the proper use and calculation of the adoption credit.
Recognize the basic individual credits for energy efficiency.
Understand the basic alternative minimum tax calculation
Apply the rules for computing tax on the unearned income of minor children and certain students.
Distinguish between the different rules for married taxpayers residing in community property states when filing separate returns.
Determine the different accounting periods allowed for tax purposes.
Determine the different accounting methods allowed for tax purposes
Understand the concept of depreciation.
Understand the calculation of depreciation expense using the MACRS tables.
Identify when a Section 179 election to expense the cost of property may be used.
Apply the limitations placed on depreciation of “listed property.”
Apply the limitations on depreciation of “luxury automobiles.”
Understand the tax treatment for goodwill and certain other intangibles.
Determine whether parties are considered related for tax purposes, and classify the tax treatment of certain related-party transactions.
Define the term “capital asset.”
Know the holding period for long-term and short-term capital gains.
Calculate the gain or loss on the disposition of an asset.
Compute the tax on capital gains.
Understand the treatment of capital losses.
Understand the treatment of Section 1231 assets.
Describe the depreciation recapture rules.
Know the general treatment of casualty losses for both personal and business purposes.
Understand the provisions allowing deferral of gain on installment sales.
Know the general treatment of like-kind exchanges.
Understand the basic tax treatment of involuntary conversions.
Know the rules governing the exclusion on gain from personal residence sales.
Compute the income tax withholding from employee wages.
Determine taxpayers’ quarterly estimated payments.
Understand the FICA tax.
Understand the federal deposit system.
Understand employer payroll reporting.
Calculate the self- employment tax (both Social Security and Medicare portions) for self-employed taxpayers.
Compute the amount of FUTA tax for an employer.
Apply the special tax and reporting requirements for household employees (the “nanny tax”).
Calculate the 0.9 percent Medicare surtax on the earned income of high-income taxpayers.
Define a partnership for tax purposes.
Understand the basic tax rules for partnership formation and operation.
Summarize the rules for partnership income reporting.
Describe the tax treatment of partnership distributions.
Determine partnership tax years.
Identify the tax treatment of transactions between partners and their partnerships.
Understand the application of the at-risk rule to partnerships.
Analyze the advantages and disadvantages of limited liability companies (LLCs).
Employ the corporate tax rates to calculate corporate tax liability.
Compute basic capital gains and losses for corporations.
Ascertain how special deductions may affect corporate taxable income.
Identify the components of Schedule M-1 and how they are reported to the IRS.
Know the corporate tax return filing and estimated tax payment requirements.
*When an IRS due date falls on a weekend, the actual due date is considered to be the next business day.
Learning Objective 11.6
Understand, in general, how an S corporation is taxed and operates.
Understand the basic tax rules for the formation of a corporation.
Describe the rules for the accumulated earnings tax and the personal holding company tax.
Define the elements of the corporate alternative minimum tax (AMT) calculation.
Identify the organizational structure of the IRS.
Understand the IRS audit process.
Define the common penalties for taxpayers and tax preparers and be able to apply them to specific situations.
Apply the general rule for the statute of limitations on tax returns and the important exceptions to the general rule.
Describe the rules that apply to tax practitioners.
Describe the Taxpayer Bill of Rights.
Understand the basic concepts of tax planning.