2021 Annual Tax Season Update Study Guide

The study guide is provided to guide you through the course material in a step by step format.

Course material is a PDF document.

Chapter 1 – New Tax Law/Recent Updates

Assignment: Chapter 1 <<>> Review Questions  Group #1: # 1-6

When you have completed the Chapter 1 text, you should be able to:

• Identify the inflation adjustments to various federal limits, including the –
  • Standard mileage rates,
  • Education savings bond program,
  • Qualified long term care insurance premiums and benefits,
  • Social security earnings limit,
  • Retirement savings contribution credit,
  • Health FSA contributions,
  • Healthcare premium tax credit,
  • Small business healthcare premium tax credit,
  • Large employer shared responsibility,
  • Archer medical savings accounts (MSA), and
  • Health savings accounts (HSA); and
• Apply the new standard mileage provisions.

Chapter 2 – New Tax Law & Extenders

Assignment: Chapter 2 <<>> Review Questions Group #2: #1-3

When you have completed the Chapter 2 text, you should be able to:

• Determine the maximum age for traditional IRA contributions;
• Recognize the tax treatment of qualified birth or adoption distributions;
• Describe the distribution requirements imposed on non-spouse inherited IRA beneficiaries;
• Identify the change in the taxation of children’s unearned income;
• Describe the changes in § 529 plan distribution rules as they apply to –
  • Repayment of student loans, and
  • The expansion of qualified expenses to include expenses associated with apprenticeship programs;
• Calculate The change in the AGI threshold for medical expense deductions; and
• Describe the current status of tax extenders applicable to –
  • Tax credits for non-business energy property,
  • Payment of tuition and fees,
  • Payment of mortgage insurance premiums, and
  • Cancellation of primary residence indebtedness.

Chapter 3 – Individual Income Components

Assignment: Chapter 3 <<>> Review Questions Group #3: #1-3

When you have completed the Chapter 3 text, you should be able to:

• Identify those items included in a taxpayer’s taxable earnings;
• Determine the tax treatment of foreign accounts and trusts;
• Recognize the limits applicable to elective deferrals;
• Calculate the tax penalty for failing to take a required minimum distribution;
• Explain the requirements for a qualified Roth account distribution; and
• Identify the tax treatment of alimony paid and received.

Chapter 4 – Proprietorship Income

Assignment: Chapter 4 <<>> Review Questions Group #4: #1-3

When you have completed the Chapter 4 text, you should be able to:

• Explain how Form 1040, Schedule C is used;
• Recognize the items included in self-employment income and expenses;
• Distinguish between a hobby and a business for tax purposes;
• Identify the recordkeeping requirements to substantiate Schedule C entries;
• Understand the tax treatment of retirement income;
• Describe how a home office deduction is figured using the actual expense and simplified methods;
• Identify the limits applicable to expensing section 179 property;
• Discuss the tax rules applicable to deducting food and beverage expenses; and
• Describe the luxury auto depreciation limits.

Chapter 5 – Individual Deductions & Credits

Assignment: Chapter 5 <<>> Review Questions Group #5: #1-4

When you have completed the Chapter 5 text, you should be able to:

• Identify taxpayers’ standard deductions based on filing status, age and blindness;
• Describe the principal Schedule A changes resulting from the TCJA, including –
  • Federal income tax deduction limits applicable to state and local taxes,
  • Limitations applicable to mortgage debt,
  • Maximum deductible charitable cash contributions,
  • Deductions for moving expenses, and
  • Deductions for personal casualty and theft losses; and
• Recognize the eligibility requirements for, and limits applicable to, various tax credits, including the –
  • Child tax credit,
  • Child and dependent care tax credit,
  • American opportunity tax credit,
  • Lifetime learning credit, and
  • Earned income credit.

Chapter 6– Credits & Filing/Paying Taxes

Assignment: Chapter 6 <<>> Review Questions Group #6: #1-2

When you have completed the Chapter 6 text, you should be able to:

• Explain the nature and tax treatment of virtual currency;
• Calculate the applicable AMTI exemption based on income and filing status;
• Describe the tax treatment of children’s taxable unearned income;
• Identify the changes in § 529 plans with respect to –
  • apprenticeship program expenses,
  • elementary and secondary school tuition, and
  • payments of interest or principal on student loan debt; and
• Discuss the § 199A qualified business income pass-through deduction.

Chapter 7– General Income Tax Review 2

Assignment: Chapter 7 <<>> Review Questions Group #7: #1-2

When you have completed the Chapter 7 text, you should be able to:

• Explain the changes made in ABLE accounts;
• Identify the tax treatment of forgiven student loan indebtedness upon death or disability;
• Calculate the expected contribution required of taxpayers obtaining tax credits to assist in purchasing healthcare coverage;
• Describe the rules governing a taxpayer’s tax withholding and estimated tax payments;
• Recognize the options available to a taxpayer for paying any tax due or receiving a tax refund; and
• Identify the due dates of income tax returns.

Chapter 8– Preparer Practices, Procedures & Professional Responsibility

Assignment: Chapter 8 <<>> Review Questions Group #8: #1-3

When you have completed the Chapter 8 text, you should be able to:

• Identify the red flags indicating possible tax-related identity theft and suggested assistance to its victims;
• Understand the laws and regulations requiring privacy and security of taxpayer data and the best practices tax preparers may implement to help assure it;
• Describe the purpose of individual taxpayer identification numbers, their effect on tax credits and how to renew them;
• Recognize the penalties applicable to a tax return preparer under Title 26;
• Identify the due diligence requirements imposed on tax return preparers with respect to claiming head of household filing status, EITC, CTC and AOTC;
• Understand the e-file requirements; and
•  Recognize the Annual Filing Season Program requirements.