SGPWX8021: Annual Federal Tax Refresher (AFTR) Study Guide/Outline

Course material is the text “2022 Annual Federal Tax Refresher .”

(For Preparation of 2021 Individual 1040 Tax Returns)

Domain 1 – New Tax Law/Recent Updates

1.1 Annual inflation adjustments (Rev. Proc. 2020-45)
1.2 New standard mileage rates (Notice 2021-02)
1.3 Resumption of required minimum distributions for IRAs and retirement plans (including age change from age 70 ½ to age
72) as outlined in the Secure Act of 2019, that was paused by the CARES Act of 2020
1.4 3-yr repayment of COVID-19 related distributions from retirement accounts and Form 8915-E
1.5 The Recovery Rebate Credit
1.6 Adjustment for charitable contributions in cash allowed for nonitemizers
1.7 Current status of tax extenders:

1.7.1 7.5% AGI limit for medical expenses permanently extended
1.7.2 Tuition and Fees deduction eliminated
1.7.3 Credit for non-business energy property extended
1.7.4 Itemized deduction for mortgage insurance premiums extended
1.7.5 Exclusion of cancellation of debt income from qualified principal residence indebtedness extended

Domain 2 – General Review

2.1 Taxability of earnings (e.g., wages, salaries, tips)
2.2 Schedule B: interest, dividends, foreign accounts and trusts
2.3 Reporting and taxability of retirement income (Social Security benefits, pensions, annuities, 401(k) distributions)
2.4 IRAs (contributions, deductions, distributions and 10% penalty)
2.5 Reporting and taxability of unemployment compensation
2.6 Alimony (divorce agreements executed before 2018; executed after 2018; and modified after 2018)
2.7 Schedule C, Profit or Loss from Business (Sole Proprietorship)

2.7.1 Determination of gross income & deductions
2.7.2 Business versus hobby
2.7.3 Business use of home (regular vs. simplified method)
2.7.4 Recordkeeping requirements
2.7.5 Entertainment expenses (100% of business meals deductible)
2.7.6 Section 179 expense limits
2.7.7 Depreciation Bonus depreciation Luxury auto depreciation limits Listed property updates

2.8 Schedule D and Form 8949, overview of capital gains and losses
2.9 Standard Deduction
2.10 Schedule A, Itemized deductions

2.10.1 State and local tax deduction ($10,000 married/$5,000 married filing separate)
2.10.2 Home mortgage interest and home equity loans
2.10.3 Charitable contributions 60% AGI limit for cash contributions suspended Contemporaneous written acknowledgement required for $250 or more

2.10.4 Federally declared disaster area casualty loss deduction (including loss deduction for non-itemizers)
2.10.5 Moving expense deduction suspended and reimbursement taxable (except active military)
2.10.6 Recordkeeping and documentation of deductions

2.11 Tax credit eligibility (child tax credit, credit for other dependents, child and dependent care tax credit, education tax credits,
earned income tax credit)
Annual Federal Tax Refresher (AFTR) Course Outline 2-26-21
2.12 Overview Topics

2.12.1 Tax treatment of the acquisition and disposition of virtual currency (Notice 2014-21)
2.12.2 Alternative Minimum Tax (AMT) – exemption/phaseout amounts
2.12.3 QBI deduction (including Form 8995 and Form 8995-A)
2.12.4 Kiddie Tax
2.12.5 Section 529 Plans
2.12.6 Achieving a Better Life Experience (ABLE) account
2.12.7 Cancellation of student debt (when to exclude from income)
2.12.8 Net operating loss (NOL)
2.12.9 Premium Tax Credit
2.12.10 Employee fringe benefits
2.12.11 Depreciation of rental property

2.13 Withholding and estimated tax payments
2.14 Balance due and refund options
2.15 Tax return due dates and filing for extensions

Domain 3 – Practices, Procedures and Professional Responsibility

3.1 Tax-related identity theft (Pub. 5199)
3.2 Safeguarding taxpayer data (Pub. 4557)
3.3 Overview and expiration of Individual Taxpayer Identification Numbers (ITINs) (Notice 2016-48)
3.4 Preparer penalties (cost of living adjustments to penalty amounts found in Rev. Proc. 2020-45)
3.5 Tax preparation due diligence (for filing as head of household, earned income tax credit, child tax credit,
and American opportunity tax credit)
3.6 E-file requirements (e.g., no pay stub filing, when to get signature form, timing for handling rejects)
3.7 Annual Filing Season Program Requirements (Pub. 5227)

3.7.1 Circular 230 and consent to Circular 230 rules
3.7.2 Limited representation