Submit the tax forms.

  • Self-Employed Business Income
    • Brennan, S. J. (2018). Tax cuts and jobs act’s effect on personal income tax. Pennsylvania CPA Journal, April, 4–8.
    • Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.
      • Chapter 6: Self-Employed Business Income
    • Form 1040: Schedule C Self-Employed Business Income.
    • Mirsky, D. B. (2019). Examining the 2017–2018 tax law changes. CPA Journal, 89(1), 6-9.
    • Mishkin, S., O’brien, E., Salisbury, I., & White, M. C. (2019). Tax guide 2019. Money, 48(2), 42–5.
    • SHOW LESSInternal Revenue ServiceIRS.gov is the homepage for the federal IRS Web site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions. Download the appropriate forms and publications from the IRS Web site to complete this assessment.
    • IRS.gov. (n.d.). Retrieved from http://www.irs.gov/
    • IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1
    • IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.
      • The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.
    • Deductions
    • Herman, T. (2014, February 16). Home-office deduction simplified. The Wall Street Journal, p. 2.
    • Intuit Inc. (2015, January 26). Intuit’s QuickBooks Online Self-Employed integrates with Stripe, simplifying tax reporting for on-demand economy workers [Press release]. Business Wire.
    • Flynn, K. E., Belak, P., & Soltis, G. (2014). Understanding individual tax compliance: Advanced deductions and related issues. Journal of Business Case Studies, 10(4), 425–440.
    • Everett, J. O., Hennig, C. J., Raabe, W. A., & Sonnier, B. M. (2013). Tax planning opportunities for individual net operating losses. Journal of Taxation, 119(3), 108–116.
    • Korb, P. J., & Williams, J. L. (2014). Simplified option versus regular method for home office deductions. The CPA Journal, 84(12), 36–39.
  • Asssessment InstructionsNote: The assessments in this course are presented in a sequence and must be completed in order. In Assessments 2–5, you will work step-by-step toward completing a 1040 tax return and all the necessary related forms, based on a provided scenario. Do not complete Assessment 2 until you have submitted and received faculty feedback for Assessment 1.PreparationCalculating correct entries for self-employment requires significant research. For those are who self-employed, entries from self-employment tax forms are necessary to complete the 1040 form.For this assessment, use information and publications from IRS.gov and the other IRS resources linked in the Resources under the Required Resources heading to research the regulations and complete the appropriate self-employment schedules, based on the provided scenario.ScenarioJacob Weaver is a contractor operating as a sole proprietorship (EIN 12-3456789). 2018 Gross income: $278,322.25.
    • Business expenses:
      • Fuel for equipment $64,080.00
      • Repairs and maintenance $17,342.00
      • Lubricants for Equipment $9,670.00
      • Insurance $6,500.00
      • Wages $6,300.00
      • Vehicles $1,768.00
      • Legal and Professional Expenses $1,750.00
      • Taxes and Licenses $1,412.00
      • Advertising $300.00
    • Clients owe him a total of $53,000, for work completed in 2018.
    • 2018 estimated tax payments were $25,000.
    • He is using a bedroom in his house as a home office. (Square footage of home 5,600  Office 240 sq. ft.)
    • He has one half-time employee, Martin, who had been unemployed since returning from Afghanistan and is disabled.
    • Martin worked for Jacob for 20 hours a week, for 41 weeks of 2018. He earned $10,500.
    • Jacob had to spend $7,350 for disabled access equipment for Martin.
    • InstructionsComplete the following:
    • Read the information provided in the scenario above.
    • Download the appropriate forms and publications from IRS.gov to complete this assessment.
    • Complete the entries on tax forms required for a sole proprietorship return.
    • Analyze official rules and instructions to correctly compute SE tax and SE deduction.
      • 1040sc.
      • 1040sse.
    • Determine whether Jacob’s business is eligible for any tax credits. Is Jacob’s business eligible to use the Work Opportunity Credit and Disabled Access Credit?
    • Determine eligible business deductions.
    • Interpret official rules and instructions to record correct entries on tax forms.
    • Submit the tax forms.
      Assessment 2

       

      Top of Form

      Bottom of Form

      • PRINT
      • Self-Employed Business Income-Schedule C
        • Details
        • Attempt 1Evaluated
        • Attempt 2Submitted
        • Attempt 3NotAvailable
      • Toggle Drawer

      Overview

      Analyze official rules and instructions to complete a Schedule C and related required tax forms, to reflect income and deductions related to self-employment as a sole proprietor.

      Note: Completing a tax form requires specific steps that need to be executed in a sequence. The assessments in this course are presented in a sequence and must be completed in order. Incorrect entries in previous assessments will result in incorrect entries in future assessments. Do not complete Assessment 2 until you have submitted and received faculty feedback for Assessment 1.

      SHOW LESS

      Introduction

      “The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” — Ronald Reagan.

      If an individual is searching for a tax strategy to offset his or her income from a primary job, being self-employed on the side is quite possibly one of the best options, along with being a real estate property owner or an investor. Each of these has the advantage of allowing an individual to reduce current income by any losses suffered from freelancing, renting out a property, or investing.

      However, the individual takes on additional work for the filing process. Schedule C must be completed, a task that requires an individual to know much more about the tax rules for recognizing income and maximizing expenses than many persons are willing to invest the time to research.

      The use of Schedule C is required when the individual’s business is not incorporated or formed as a partnership or limited liability company.

      Demonstration of Proficiency

      By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

        • Competency 1: Analyze the background of the federal income tax system.
          • Analyze official information to identify tax forms required for a sole proprietorship.
        • Competency 2: Analyze the basics of individual income tax return preparation.
          • Analyze official rules and instructions to determine eligible business tax credits.
          • Analyze official rules and instructions to determine eligible deductions.
          • Analyze official rules and instructions to correctly compute SE tax and SE deduction.
          • Interpret official rules and instructions to record correct entries on all tax forms.

      Competency Map

      CHECK YOUR PROGRESSUse this online tool to track your performance and progress through your course.

      • Toggle Drawer

      Resources

      Self-Employed Business Income

        • Brennan, S. J. (2018). Tax cuts and jobs act’s effect on personal income tax. Pennsylvania CPA Journal, April, 4–8.
        • Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.
          • Chapter 6: Self-Employed Business Income
        • Form 1040: Schedule C Self-Employed Business Income.
        • Mirsky, D. B. (2019). Examining the 2017–2018 tax law changes. CPA Journal, 89(1), 6-9.
        • Mishkin, S., O’brien, E., Salisbury, I., & White, M. C. (2019). Tax guide 2019. Money, 48(2), 42–5.

      SHOW LESS

      Internal Revenue Service

      IRS.gov is the homepage for the federal IRS Web site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions. Download the appropriate forms and publications from the IRS Web site to complete this assessment.

        • IRS.gov. (n.d.). Retrieved from http://www.irs.gov/
        • IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1
        • IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.
          • The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.

      Deductions

        • Herman, T. (2014, February 16). Home-office deduction simplified. The Wall Street Journal, p. 2.
        • Intuit Inc. (2015, January 26). Intuit’s QuickBooks Online Self-Employed integrates with Stripe, simplifying tax reporting for on-demand economy workers [Press release]. Business Wire.
        • Flynn, K. E., Belak, P., & Soltis, G. (2014). Understanding individual tax compliance: Advanced deductions and related issues. Journal of Business Case Studies, 10(4), 425–440.
        • Everett, J. O., Hennig, C. J., Raabe, W. A., & Sonnier, B. M. (2013). Tax planning opportunities for individual net operating losses. Journal of Taxation, 119(3), 108–116.
        • Korb, P. J., & Williams, J. L. (2014). Simplified option versus regular method for home office deductions. The CPA Journal, 84(12), 36–39.
      • Asssessment Instructions

      Note: The assessments in this course are presented in a sequence and must be completed in order. In Assessments 2–5, you will work step-by-step toward completing a 1040 tax return and all the necessary related forms, based on a provided scenario. Do not complete Assessment 2 until you have submitted and received faculty feedback for Assessment 1.

      Preparation

      Calculating correct entries for self-employment requires significant research. For those are who self-employed, entries from self-employment tax forms are necessary to complete the 1040 form.

      For this assessment, use information and publications from IRS.gov and the other IRS resources linked in the Resources under the Required Resources heading to research the regulations and complete the appropriate self-employment schedules, based on the provided scenario.

      Scenario

      Jacob Weaver is a contractor operating as a sole proprietorship (EIN 12-3456789). 2018 Gross income: $278,322.25.

        • Business expenses:
          • Fuel for equipment $64,080.00
          • Repairs and maintenance $17,342.00
          • Lubricants for Equipment $9,670.00
          • Insurance $6,500.00
          • Wages $6,300.00
          • Vehicles $1,768.00
          • Legal and Professional Expenses $1,750.00
          • Taxes and Licenses $1,412.00
          • Advertising $300.00
        • Clients owe him a total of $53,000, for work completed in 2018.
        • 2018 estimated tax payments were $25,000.
        • He is using a bedroom in his house as a home office. (Square footage of home 5,600  Office 240 sq. ft.)
        • He has one half-time employee, Martin, who had been unemployed since returning from Afghanistan and is disabled.
        • Martin worked for Jacob for 20 hours a week, for 41 weeks of 2018. He earned $10,500.
        • Jacob had to spend $7,350 for disabled access equipment for Martin.

      Instructions

      Complete the following:

        • Read the information provided in the scenario above.
        • Download the appropriate forms and publications from IRS.gov to complete this assessment.
        • Complete the entries on tax forms required for a sole proprietorship return.
        • Analyze official rules and instructions to correctly compute SE tax and SE deduction.
          • 1040sc.
          • 1040sse.
        • Determine whether Jacob’s business is eligible for any tax credits. Is Jacob’s business eligible to use the Work Opportunity Credit and Disabled Access Credit?
        • Determine eligible business deductions.
        • Interpret official rules and instructions to record correct entries on tax forms.
        • Submit the tax forms.

      Assessment 3

      PRINT

      Inclusions, Exclusions, and AGI

      Details

      Attempt 1Available

      Attempt 2NotAvailable

      Attempt 3NotAvailable

      Toggle Drawer

      Overview

      Apply the rules associated with inclusions and exclusions to an individual’s gross income and apply another set of code rules to determine a taxpayer’s AGI.

      Note: Completing a tax form requires specific steps that need to be executed in a sequence. The assessments in this course are presented in a sequence and must be completed in order. Incorrect entries in previous assessments will result in incorrect entries in future assessments. Do not complete Assessment 3 until you have submitted and received faculty feedback for Assessment 2.

      SHOW MORE

      Toggle Drawer

      Resources

      Gross Income

      Block, S. (2019). Our guide to saving on your taxes. Kiplinger’s Personal Finance, 73(3), 22–30.

      Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.

      Chapter 3, “Gross Income: Inclusions and Exclusions.”

      Chapter 4, “Adjustments for Adjusted Gross Income.”

      Form 1040: Income.

      Form 1040: Adjusted Gross Income.

      Mirsky, D. B. (2019). Examining the 2017–2018 tax law changes. CPA Journal, 89(1), 6–9.

      Mishkin, S., O’brien, E., Salisbury, I., & White, M. C. (2019). Tax guide 2019. Money, 48(2), 42–50.

      SHOW LESS

      Internal Revenue Service

      IRS.gov is the homepage for the federal IRS Web site. Use the tabs at the top of the page to navigate the site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions. Download the appropriate forms and publications from the IRS Web site to complete this assessment.

      IRS.gov. (n.d.). Retrieved from http://www.irs.gov/

      IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1

      IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos

      The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.

      Income Tax Deferral

      Drake, A. E. (2015, January 5). Reducing your taxes before the end of the year. Mondaq Business Briefing.

      Vento, J. J. (2014, March). Beating the tax man. USA Today, 142(2826), 58–59.

      Ashton, M. (2015, March 5). The forgotten tax deductions. Mondaq Business Briefing.

      Halperin, D. I., & Warren, A. C., Jr. (2014). Understanding income tax deferral. New York University Tax Law Review, 67 Tax L. Rev. 317.

      Asssessment Instructions

      Note: The assessments in this course are presented in a sequence and must be completed in order. In Assessments 2–5, you will work step-by-step toward completing a 1040 tax return and all the necessary related forms, based on a provided scenario. Do not complete Assessment 3 until you have submitted and received faculty feedback for Assessment 2. Incorrect entries in Assessment 2 affect the entries in Assessment 3.

      Preparation

      For this assessment, use information and publications from IRS.gov and the other IRS resources linked in the Resources under the Required Resources heading to determine the adjusted gross income (AGI) for Jacob and Taylor Weaver, based on the provided scenario.

      The primary purpose of the Internal Revenue Service is to raise revenue for the government. However, the U.S. Congress has chosen to exempt certain income from taxation, such as scholarships, gifts, life insurance proceeds, municipal bond interest, and employee fringe benefits.

      Scenario

      Jacob and Taylor Weaver, ages 45 and 42 respectively, are married and are filing jointly in 2018.

      They have three children, Ashley, age 9; Patrick, age 6; and John, age 17.

      Social Security numbers are: Jacob, 222-33-4444; Taylor, 555-66-7777; Ashley, 888-99-1234; Patrick, 789-56-4321; John, 123-45-6789.

      Taylor works part-time as a paralegal.

      She earned $31,000 in 2018.

      Income Taxes: $4,200 withheld.

      Interest received from Local Bank: $6,575.

      Estimated tax payments: $25,000.

      $350 paid with their 2017 state tax return.

      Jacob and Taylor bought their first house in 2018.

      Home mortgage interest: $12,246.

      Property tax: $12,230.

      Federal income withholding: $2,350.

      Charities: $4,500.

      $435 to rent a moving truck.

      $8,000 to put new siding on the house.

      $11,600 for child care expenses ($5,800 for each child).

      It was paid to Lil Tigers Daycare, 1115 S. Garrison St., Muncie, IN 47305 (EIN 98-7654321).

      Taylor is a part-time student at Ball State University in Muncie.

      She received a 1098-T indicating tuition and fees for 2018 in the amount of $6,011.

      Health insurance for the family, through Taylor’s job, cost $7,500 for all 12 months of 2018.

      They paid deductibles and co-payments of $2,550.

      Instructions

      Complete the following:

      Read the information in the scenario below.

      Download the appropriate forms and publications from IRS.gov.

      Enter information from Assessment 2, Schedules C and SE, into the 1040 form.

      Apply the rules for adjustments to adjusted gross income.

      Enter applicable information from the scenario into the 1040 form.

      Interpret official rules and instructions to record correct entries on the tax form.

      Calculate the AGI for the Weavers.

      Submit the tax form.

      Assessment 4

       

      Top of Form

      Bottom of Form

      • PRINT
      • Itemized Deductions – Schedule A
        • Details
        • Attempt 1Available
        • Attempt 2NotAvailable
        • Attempt 3NotAvailable
      • Toggle Drawer

      Overview

      Determine itemized deductions and complete a Schedule A for a tax scenario.

      Note: Completing a tax form requires specific steps that need to be executed in a sequence. The assessments in this course are presented in a sequence and must be completed in order. Incorrect entries in previous assessments will result in incorrect entries in future assessments. Do not complete Assessment 4 until you have submitted and received faculty feedback for Assessment 3.

      SHOW LESS

      Introduction

      “If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don’t get wet you can keep.”

      — Will Rogers, American cowboy and humorist.

      Staying with Will Rogers’ analogy, Schedule A is analogous to a sealed sandwich bag that protects some of the coins from the raging waters of government greed. If you are fortunate enough to have made significant income during a tax year, it is quite possible that you also have significant deductions to offset those monies. The Schedule A tax form allows taxpayers to itemize their deductions, rather than using the standard deduction.

      Reference

      Quotegarden.com. (n.d.). Quotations about taxes. Retrieved from http://www.quotegarden.com/taxes.html

      Demonstration of Proficiency

      By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

        • Competency 2: Analyze the basics of individual income tax return preparation.
          • Apply laws and rules for state and local deductions on Schedule A tax form.
          • Apply laws and rules for medical expenses on Schedule A tax form.
          • Apply laws and rules for interest deductions on Schedule A tax form.
          • Apply laws and rules for charitable contributions on Schedule A tax form.
          • Interpret official rules and instructions to record correct entries on tax forms.

      Competency Map

      CHECK YOUR PROGRESSUse this online tool to track your performance and progress through your course.

      • Toggle Drawer

      Resources

      Itemized Deductions

        • Block, S. (2019). Our guide to saving on your taxes. Kiplinger’s Personal Finance, 73(3), 22–30.
        • Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.
          • Chapter 5, Itemized Deductions.
        • Flynn, K. E., Belak, P., & Soltis, G. (2014). Understanding individual tax compliance: Advanced deductions and related issuesJournal of Business Case Studies10(4), 425–440.
        • Hanson, A., & Martin, H. (2014). Housing market distortions and the mortgage interest deductionPublic Finance Review42(5), 582–607.
        • Martin, A. (2014, October 29). Homeowners: Fall planning brings spring tax savings; what homeowners can do now to prepare for tax time. Rules for deducting mortgage interest and itemizing other expenses to lower the tax bill. Wall Street Journal (Online).
        • Mirsky, D. B. (2019). Examining the 2017–2018 tax law changes. CPA Journal, 89(1), 6–9.
        • Mishkin, S., O’brien, E., Salisbury, I., & White, M. C. (2019). Tax guide 2019. Money, 48(2), 42–50.

      SHOW LESS

      Internal Revenue Service

      IRS.gov is the homepage for the federal IRS Web site. Use the tabs at the top of the page to navigate the site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions. Download the appropriate forms and publications from the IRS Web site to complete this assessment.

        • IRS.gov. (n.d.). Retrieved from http://www.irs.gov/
        • IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1
        • IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.
          • The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.
      • Asssessment Instructions

      Note: The assessments in this course are presented in a sequence and must be completed in order. In Assessments 2–5, you will work step-by-step toward completing a 1040 tax return and all the necessary related forms, based on a provided scenario. Do not complete Assessment 4 until you have submitted and received faculty feedback for Assessment 3.

      Preparation

      The Schedule A tax form allows taxpayers to itemize their deductions, rather than using the standard deduction. For this assessment, you will determine itemized deductions for the Weavers for Schedule A.

      Scenario

      Jacob and Taylor Weaver, ages 45 and 42 respectively, are married and are filing jointly in 2018.

        • They have three children, Ashley, age 9; Patrick, age 6; and John, age 17.
          • Social Security numbers are: Jacob, 222-33-4444; Taylor, 555-66-7777; Ashley, 888-99-1234; Patrick, 789-56-4321; John, 123-45-6789.
        • Taylor works part-time as a paralegal.
          • She earned $31,000 in 2018.
        • Income Taxes: $4,200 withheld.
        • Interest received from Local Bank: $6,575.
        • Estimated tax payments: $25,000.
          • $350 paid with their 2017 state tax return.
        • Jacob and Taylor bought their first house in 2018.
          • Home mortgage interest: $12,246.
          • Property tax: $12,230.
        • Federal income withholding: $2,350.
        • Charities: $4,500.
        • $435 to rent a moving truck.
        • $8,000 to put new siding on the house.
        • $11,600 for child care expenses ($5,800 for each child).
          • It was paid to Lil Tigers Daycare, 1115 S. Garrison St., Muncie, IN 47305 (EIN 98-7654321).
        • Taylor is a part-time student at Ball State University in Muncie.
          • She received a 1098-T indicating tuition and fees for 2018 in the amount of $6,011.
        • Health insurance for the family, through Taylor’s job, cost $7,500 for all 12 months of 2018.
        • They paid deductibles and co-payments of $2,550.

      Instructions

      For this assessment, complete the following:

        • Read the information provided in the scenario above.
        • Use information and publications from IRS.gov and the other IRS resources linked in the Resources to determine itemized deductions for the Weavers for Schedule A, based on the scenario information.
        • Add the information you determine to Schedule A.
        • Submit Schedule A.

      Assessment 5

       

      Top of Form

      Bottom of Form

      • PRINT
      • Tax Credits on 1040 to Reduce Tax Liability
        • Details
        • Attempt 1Available
        • Attempt 2NotAvailable
        • Attempt 3NotAvailable
      • Toggle Drawer

      Overview

      Determine eligibility for available tax credits and complete an official worksheet for each credit, to demonstrate eligibility.

      Note: Completing a tax form requires specific steps that need to be executed in a sequence. The assessments in this course are presented in a sequence and must be completed in order. Incorrect entries in previous assessments will result in incorrect entries in future assessments. Do not complete Assessment 5 until you have submitted and received faculty feedback for Assessment 4.

      SHOW LESS

      Introduction

      Tax credits work to lower taxpayer liability rather than provide refund incentives. A tax credit is subtracted directly from the taxpayer’s tax obligation, providing equal relief to all taxpayers. This can make the credit more valuable than a deduction taken during the filing process.

      There are credits for foreign taxes paid, child and dependent care expenses, and for the elderly or disabled; credits for education, retirement savings contributions, and residential energy; and child tax credit, adoption, retirement savings, and earned income credits.

      Demonstration of Proficiency

      By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

        • Competency 1: Analyze the background of the federal income tax system.
          • Interpret official rules and instructions to record correct entries on tax forms.
        • Competency 2: Analyze the basics of individual income tax return preparation.
          • Analyze tax rules to complete tax credit worksheets to prove eligibility.
          • Apply laws and rules to correctly enter data on Schedule A.
          • Apply rules and tax tables to record the correct tax owed on the 1040.
          • Calculate the amount of a refund on the 1040.

      Competency Map

      CHECK YOUR PROGRESSUse this online tool to track your performance and progress through your course.

      • Toggle Drawer

      Resources

      Tax Credits

        • Baldwin, D. R., Carlton, L. H., Fava, K. L., Haim, D, Horn, J., Morrow, S., . . . Zidik, D. J., Jr. (2014). Individual taxation: Digest of recent developments: Part IIThe Tax Adviser45(4), 274–280.
        • Block, S. (2019). Our guide to saving on your taxes. Kiplinger’s Personal Finance, 73(3), 22–30.
        • Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.
          • Chapter 9, “Tax Credits (Schedule 3, Lines 48 through 54, and /schedule 5, Lines 70 through 74) Form 1040.”
        • Form 1040: Tax Credits.
        • Galletta, P. Z. (2014). Taking credit for your work: A roundup of federal tax credits available to individualsThe CPA Journal84(12), 17–23.
        • Mirsky, D. B. (2019). Examining the 2017–2018 tax law changes. CPA Journal, 89(1), 6–9.
        • Mishkin, S., O’brien, E., Salisbury, I., & White, M. C. (2019). Tax guide 2019. Money, 48(2), 42–50.

      SHOW LESS

      Internal Revenue Service

      IRS.gov is the homepage for the federal IRS Web site. Use the tabs at the top of the page to navigate the site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions. Download the appropriate forms and publications from the IRS Web site to complete this assessment.

        • IRS.gov. (n.d.). Retrieved from http://www.irs.gov/
        • IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1
        • IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.
          • The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.
      • Asssessment Instructions

      Note: The assessments in this course are presented in a sequence and must be completed in order. In Assessments 2–5, you will work step-by-step toward completing a 1040 tax return and all the necessary related forms, based on a provided scenario. Do not complete Assessment 5 until you have submitted and received faculty feedback for Assessment 4.

      Preparation

      This assessment will require significant research and critical thinking to complete each required form successfully. An incorrect entry on one form will create incorrect entries in other forms.

      There are two parts to this assessment. Be sure to complete both parts and submit the necessary materials.

        • Part 1: Determine eligible tax credits by completing official worksheets.
        • Part 2: Complete Schedule A and the 1040.

      Scenario

      Jacob and Taylor Weaver, ages 45 and 42 respectively, are married and are filing jointly in 2018.

        • They have three children, Ashley, age 9; Patrick, age 6; and John, age 17.
          • Social Security numbers are: Jacob, 222-33-4444; Taylor, 555-66-7777; Ashley, 888-99-1234; Patrick, 789-56-4321; John, 123-45-6789.
        • Taylor works part-time as a paralegal.
          • She earned $31,000 in 2018.
        • Income Taxes: $4,200 withheld.
        • Interest received from Local Bank: $6,575.
        • Estimated tax payments: $25,000.
          • $350 paid with their 2017 state tax return.
        • Jacob and Taylor bought their first house in 2018.
          • Home mortgage interest: $12,246.
          • Property tax: $12,230.
        • Federal income withholding: $2,350.
        • Charities: $4,500.
        • $435 to rent a moving truck.
        • $8,000 to put new siding on the house.
        • $11,600 for child care expenses ($5,800 for each child).
          • It was paid to Lil Tigers Daycare, 1115 S. Garrison St., Muncie, IN 47305 (EIN 98-7654321).
        • Taylor is a part-time student at Ball State University in Muncie.
          • She received a 1098-T indicating tuition and fees for 2016 in the amount of $6,011.
        • Health insurance for the family, through Taylor’s job, cost $7,500 for all 12 months of 2016.
          • They paid deductibles and co-payments of $2,550.

      Instructions

        • Read the information provided in the scenario above.
        • Download the following tax forms and instructions from IRS.gov, linked in the Resources under the Required Resources heading:
          • 1040.
          • Schedule A.
          • Schedule 1.
          • Schedule 3.
          • 2441.
          • 8863.

      Part 1

      Use the information in the scenario, on IRS.gov, and in the interactive IRS tools to interpret official rules and instructions to determine available tax credits.

        • Complete an official worksheet for each tax credit to demonstrate eligibility.
        • Submit each tax credit worksheet.

      Part 2

      Use the information in the scenario, on IRS.gov, and in the interactive IRS tools to Interpret official rules and instructions to complete the following:

        • Complete Schedule A.
        • Enter data from Schedule A into the 1040.
        • Apply the rules and tax tables to calculate the tax owed and the amount of any refund.
        • Submit Schedule A and the completed 1040.

      TutorialsSupportLog Out

      Assessment 6

       

      Top of Form

      Bottom of Form

      • PRINT
      • Applying the IRS Code Rules
        • Details
        • Attempt 1Available
        • Attempt 2NotAvailable
        • Attempt 3NotAvailable
      • Toggle Drawer

      Overview

      Complete the partnership interest problem that requires you to apply research and knowledge of the rules and laws associated with at-risk or passive activity losses, as well as the individual alternative minimum tax (AMT).

      Note: The assessments in this course are presented in a sequence and must be completed in order. Do not complete Assessment 6 until you have submitted and received faculty feedback for Assessment 5.

      SHOW LESS

      Introduction

      Tax regulations are in a state of constant change. Being able to locate and correctly interpret and apply the information to a problem is a highly valued skill.

      Demonstration of Proficiency

      By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

        • Competency 1: Analyze the background of the federal income tax system.
          • Explain the tax effect in a specified scenario for the last year and the current year.
        • Competency 2: Analyze the basics of individual income tax return preparation.
          • Calculate the initial basis, allowed losses, and ending at-risk amounts.
          • Explain how to treat a loss on a federal income tax return.
          • Calculate what can be deducted on a final income tax return.
          • Calculate the loss disallowed by at-risk rules and how much of the loss is disallowed by the passive loss rules.
          • Calculate itemized deductions for AMT purposes and identify the amount of the AMT adjustment.

      Competency Map

      CHECK YOUR PROGRESSUse this online tool to track your performance and progress through your course.

      • Toggle Drawer

      Resources

      Alternative Minimum Tax

        • Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.
          • Chapter 13, At-Risk/Passive Activity Loss Rules and the Individual Alternative Minimum Tax.

      SHOW LESS

      Internal Revenue Service

      IRS.gov is the homepage for the federal IRS Web site. Use the tabs at the top of the page to navigate the site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions.

        • IRS.gov. (n.d.). Retrieved from http://www.irs.gov/
        • IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1
        • IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.
          • The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.

      Income Tax Rates

        • Halperin, D. I., & Warren, A. C., Jr. (2014). Understanding income tax deferralNew York University Tax Law Review, 67 Tax L. Rev. 317.
        • Dungan, A., & Parisi, M. (2014). Individual income tax rates and shares, 2011: Statistics of incomeSOI Bulletin33(4), 5–50.
        • Flynn, K. E., Belak, P., & Soltis, G. (2014). Understanding individual tax compliance: Advanced deductions and related issuesJournal of Business Case Studies10(4), 425–440.
      • Asssessment Instructions

      Note: The assessments in this course are presented in a sequence and must be completed in order. Do not complete Assessment 6 until you have submitted and received faculty feedback for Assessment 5.

      Preparation

      Tax regulations are in a state of constant change. Being able to locate, correctly interpret, and apply the information to a problem is a highly valued skill. Consider each problem and research the applicable tax regulations to answer the questions.

      Instructions

      For this assessment, complete the following:

        • Download Assessment 6 Problems [DOCX].
        • Using the primary source of IRS.gov and the IRS Interactive Tax Assistant and Tax Trails, locate and interpret regulations and publications that relate to each problem.
        • Record your answers to the problems in a Word document.
        • Provide an explanation for each answer, including any related calculations and evidence.
        • Include the following criteria from the scoring guide in your responses.
          • Calculate the initial basis, allowed losses, and ending at-risk amounts.
          • Explain how to treat a loss on a federal income tax return.
          • Calculate what can be deducted on a final income tax return.
          • Calculate the loss disallowed by at-risk rules and how much of the loss is disallowed by passive loss rules.
          • Explain the tax effect in a specified scenario for the last year and the current year.
          • Calculate itemized deductions for AMT purposes and identify the amount of the AMT adjustment.
        • Submit the Word document containing your answers to the problems and the explanations for your answers.

      Assessment 7

       

      Top of Form

      Bottom of Form

      • PRINT
      • Partnership and Corporate Tax Reporting
        • Details
        • Attempt 1Available
        • Attempt 2NotAvailable
        • Attempt 3NotAvailable
      • Toggle Drawer

      Overview

      Complete the problem in the partnership scenario that requires research and analysis as well as computation.

      Note: The assessments in this course are presented in a sequence and must be completed in order. Do not complete Assessment 7 until you have submitted and received faculty feedback for Assessment 6.

      SHOW LESS

      Introduction

      There is a need for other forms of business ownership beyond sole proprietorship. Small businesses can only do so much to provide the public with an array of goods and services that match the public’s insatiable appetite. To this end, large corporate entities are better equipped to provide the required goods and services. Partnerships, in all of their forms, also fill a niche, especially in the area of services, such as legal, health, and welfare.

      When it comes to these business entities’ responsibility for reporting their income and deductions, the tax code becomes very complicated. Their tax reporting needs may require the services of certified public accountants, who know the code thoroughly.

      Corporate and partnership tax preparation require highly developed skills in research and analysis.

      Demonstration of Proficiency

      By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

        • Competency 3: Assess types of non-individual entities subject to federal taxation.
          • Determine partners’ recognized gains, explaining how much they gained and the rationale.
          • Prepare self-employment income and basis at the end of the year.
          • Determine how much gain or loss must be recognized on a distribution, ending partnership basis, and basis in equipment.
          • Calculate the gain or loss on the sale of a partnership interest.
          • Determine the basis of the stock in the hands of the shareholder.
          • Determine taxable income on a C corporation and the book income.
          • Determine the amount of taxable dividend, nontaxable distribution, and capital gain.

      Competency Map

      CHECK YOUR PROGRESSUse this online tool to track your performance and progress through your course.

      • Toggle Drawer

      Resources

      Partnerships and Corporations

        • Burton, H. A. (2019). Current developments in partners and partnerships. Tax Adviser, 1–18.
        • Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., & Schisler, D. (2019). Fundamentals of taxation 2019 (12th ed.). New York, NY: McGraw-Hill. Available in the courseroom via the VitalSouce Bookshelf link.
          • Chapter 14, “Partnership Taxation.”
          • Chapter 15, “Corporate Taxation.”
        • Form 1040: Schedule A, Profit or Loss from Business.
        • Sikarwar, D. (2015, February 21). Budget 2015 may propose significant changes in income tax and corporate tax structures, boost savingsThe Economic Times (Online).
        • Shaviro, D. N (2009). Decoding the U.S. corporate tax. Washington, DC: Urban Institute Press.

      SHOW LESS

      Internal Revenue Service

      IRS.gov is the homepage for the federal IRS Web site. Use the tabs at the top of the page to navigate the site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions.

        • IRS.gov. (n.d.). Retrieved from http://www.irs.gov/
        • IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1
        • IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.
          • The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.
      • Asssessment Instructions

      Note: The assessments in this course are presented in a sequence and must be completed in order. Do not complete Assessment 7 until you have received faculty feedback for Assessment 6.

      Preparation

      Corporate and partnership tax preparation require highly developed skills in research and analysis. Consider the following problems and research the applicable tax regulations to answer the questions.

      Instructions

      For this assessment, complete the following:

        • Download Assessment 7 Problems [DOCX].
        • Using the primary source of IRS.gov and the IRS Interactive Tax Assistant and Tax Trails, locate and interpret regulations and publications that relate to each problem.
        • Record your answers to the problems in a Word document.
        • Provide an explanation for each answer, including any related calculations and evidence.
        • Include the following criteria from the scoring guide in your responses.
          • Determine partners’ recognized gains, explaining how much they gained and the rationale.
          • Prepare self-employment income and basis at the end of the year.
          • Determine how much gain or loss must be recognized on a distribution, ending partnership basis, and basis in equipment.
          • Calculate the gain or loss on the sale of a partnership interest.
          • Determine the basis of the stock in the hands of the shareholder.
          • Determine taxable income on a C corporation and the book income.
          • Determine the amount of taxable dividend, nontaxable distribution, and capital gain.
        • Submit the Word document containing your answers to the problem and the explanations for your answers.

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