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SEE 1 · Individuals

Individual income tax from data gathering to specialized returns. 100 multiple choice questions in 3.5 hours.

1. Preliminary Work and Taxpayer Data

Filing requirements and status

Check age, income and dependents. Status is set on the last day of the year.

Example. A widow in the two years after her spouse's death may use qualifying surviving spouse if she has a dependent child.

2. Income and Assets

Taxable and excluded income

Wages, interest, dividends, rents, retirement income and gains. Exclusions include muni interest and gifts.

Example. Up to 85% of Social Security can be taxable.

3. Deductions and Credits

Standard vs itemized and credits

Choose the larger deduction. Know CTC, EIC, education and dependent care credits, and the new OBBBA deductions as they apply to the testing window.

Example. Compare itemized total against the standard deduction every year.

4. Taxation

Tax computation

Ordinary rates, capital gain rates, AMT, kiddie tax, SE tax and NIIT.

Example. Qualified dividends use capital gain rates.

5. Advising the Individual Taxpayer

Planning

Withholding, estimated taxes, retirement and recordkeeping.

Example. Pay 100% of last year's tax, or 110% if AGI was over 150,000, to avoid the underpayment penalty.

6. Specialized Returns for Individuals

Estate and gift returns

Form 706 and Form 709 basics, plus FBAR awareness.

Example. Foreign accounts over 10,000 combined at any time need an FBAR.

Chapters

  1. Getting started: prior returns, taxpayer data and IRS letters. Using prior-year returns and carryovers; personal data, IP PIN and identity checks; reading prior IRS correspondence; transcripts and authorizations
  2. Residency, citizenship, ITIN and Form 1040-NR. Green card and substantial presence tests; resident, nonresident and dual-status aliens; ITIN and Form W-7; deductions on Form 1040-NR
  3. Filing requirements, due dates and filing status. Who must file; due dates and extensions; disaster relief; injured spouse basics; single, joint, separate, head of household and surviving spouse; choosing the best status
  4. Dependents. Qualifying child and qualifying relative tests; tie-breakers; multiple support agreements (Form 2120); release of claim by the custodial parent (Form 8332)
  5. Wages, fringe benefits, worker status, clergy and military. Taxable and excluded compensation; fringe benefits; employee or contractor; clergy housing and dual status; combat pay and military rules
  6. Interest, dividends, constructive receipt and the kiddie tax. Taxable and tax-exempt interest; OID; savings bonds; ordinary, qualified and capital gain dividends; return of capital; constructive receipt and constructive dividends; Forms 8615 and 8814
  7. Other income: gambling, cancelled debt, recoveries and 1099 reporting. Personal property rental; gambling winnings and losses; cancelled debt and Form 982; scholarships, barter, hobby and illegal income; royalties; state refunds and the tax benefit rule; Forms 1099-MISC, NEC and K
  8. Self-employment: Schedules C, F and SE. Business income and expenses; home office and vehicle; Schedule F; self-employment tax; the SE tax and health insurance adjustments
  9. Rentals, passive losses, K-1 income and PTPs. Rental real estate and vacation homes; passive activity rules and the $25,000 allowance; real estate professionals; K-1 items and basis; publicly traded partnerships
  10. Foreign income and the foreign tax credit. Foreign earned income and housing exclusions (Form 2555); treaties; foreign tax credit (Form 1116); foreign trusts and corporations at a glance
  11. IRAs: contributions, basis, Roth and conversions. Contribution limits and deductibility; Form 8606 basis; Roth rules; excess contributions; prohibited transactions; conversions and recharacterization
  12. Retirement distributions, RMDs, inherited accounts and Social Security. Form 1099-R; rollovers; early distribution penalty and exceptions; required minimum distributions; plan loans; taxable Social Security; inherited accounts; foreign pensions
  13. Basis and capital gains. Basis of purchased, gifted and inherited property; stock splits and dividends; netting gains and losses; digital assets; options, ISOs and ESPPs; bad debts; investor or trader
  14. Sales of property: home, installment, like-kind and recapture. Section 121 home sale exclusion; installment sales; like-kind exchanges; depreciation recapture and Form 4797; Form 1099-A
  15. Adjustments to income and the new OBBBA deductions. HSAs; student loan interest; educator expenses; alimony; military moving; other adjustments; deductions for tips, overtime, seniors and car loan interest
  16. Standard and itemized deductions. Standard deduction; medical; state and local taxes; mortgage and investment interest; charitable gifts; casualty and theft losses; other itemized deductions
  17. The qualified business income deduction. Qualified trade or business; the 20% deduction; wage and property limits; specified service businesses; aggregation; negative QBI carryover
  18. Family and education credits. Child and dependent care credit; child tax credit and credit for other dependents; American opportunity and lifetime learning credits; earned income credit and due diligence; adoption credit
  19. Premium tax credit and other credits. ACA household income and size; premium tax credit and Form 8962; health coverage tax credit; energy and clean vehicle credits; saver's credit; elderly or disabled credit
  20. Computing the tax: AMT, NIIT and other taxes. Tax rates and capital gain rates; alternative minimum tax and the prior-year credit; household employees; excess Social Security; income in respect of a decedent; net investment income tax; additional Medicare tax; uncollected FICA; other taxes
  21. Payments, penalties, amended returns and spouse relief. Withholding and estimated tax; underpayment penalty and interest; carryovers; injured and innocent spouse; refund claims and amended returns; penalties of perjury
  22. Advising the individual taxpayer. Reporting duties; planning property sales; education planning and 529 plans; estate and retirement planning; marriage and divorce; timing and character planning
  23. Estate tax and Form 706. Gross and taxable estate; unified credit; jointly held property; marital deduction and portability; life insurance and retirement accounts; Forms 706 and 1041
  24. Gift tax, GST and Form 709. Gift splitting; annual exclusion; unified credit; generation-skipping transfer tax; filing Form 709
  25. International information reporting. FBAR and Form 8938; Forms 5471, 8865 and 3520; covered accounts; penalties and the statute of limitations; FBAR versus Form 8938
  26. IRS forms workshop. Form 1040 and Schedules 1 to 3, A to F, H, R, SE and 8812; information returns; Forms 2441, 8863, 8962, 8606, 5329, 8889, 6251, 8959, 8960, 2210, 1040-X, 8379, 8857, 706, 709, FinCEN 114 and 8938