PWX1120: 2021 Annual Tax Season Update Study Guide

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.