Designed to make the practitioner comfortable with "high traffic" issues, this program enables participants to discuss and handle business/personal tax essentials. The course examines and explains the practical aspects of individual & corporate planning, bridging the gap between theory and application. Significant new developments are summarized with emphasis on tax savings ideas. This course examines and explains the practical aspects of using the closely held corporation to maximize after-tax return on business operations. Recent developments giving corporations a competitive edge over other entities are explored and detailed. Practitioners are alerted to often missed fringe benefits, retirement planning opportunities, corporate business deductions, income splitting possibilities and little known estate planning techniques.
Delivery Method: Online Interactive Self Study
Prerequisites: General understanding of federal income taxation.
Advanced Preparation: None
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Chapter 1: Individual Tax Elements
1. Identify federal revenue tax sources noting how gross income is reduced by certain credits, exclusions, and deductions, recognize current schedules, tables, and statutory amounts, and select withholding and/or estimated tax responsibility.
2. Specify the various filing statuses and their filing requirements noting the advantages and disadvantages of each.
3. Determine what constitutes gross income under Section 61 noting 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.
4. 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.
5. Recognize income tax deductions and their use to reduce tax liability by:
a. Identifying personal, spousal and dependency exemptions and reporting requirements including pre-2005 dependency rules;
b. Specifying the five fundamental categories of interest expense noting whether they are deductible;
c. Recognizing which education expenses are deductible and nondeductible;
d. Determining what constitutes Medicare and whether medical care expenses including medical insurance premiums, costs for meals and lodging, transportation expenses, expenditures for making permanent improvements to a home and lifetime care advance payments are deductible or nondeductible;
e. Specifying variables that impact the deductibility of charitable contributions, identifying qualified organizations and limitations for these purposes, and identifying the types of contributions that can be made, their tax treatment, and substantiation requirements;
f. Identifying the taxes that individuals may deduct under Section 164 and specifying the differences between casualty and theft noting the rules for taking a deduction for all or part of each loss;
g. Specifying deductions that are subject to the 2% of AGI limitation, up to six deductions not subject to the 2% limit, and nondeductible expenses; and
h. Determining whether a taxpayer meets distance and time tests for deductible moving expenses under Section 217.
6. Determine distinctions among several types of tax credits identifying the eligibility requirements and changes created by recent tax legislation to individual tax returns.
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