Certified Tax Specialist - Curriculum
Module I – The Individual Tax Return, Gross Income, and Exclusions
Besides raising revenue, the income tax is used as a tool for social and economic change. In the U.S., everyone falls into one of five taxable and reporting entities. Individual taxpayers calculate their tax liability in accordance with a tax formula; knowing one's tax filing status can save thousands of dollars. Clients are allowed two types of exemptions; becoming familiar with a handful of flowcharts makes the process easier to understand.

  • Objectives and history of the tax system, tax entities, and the tax formula for individuals
  • Filing status, tax computation, personal and dependency exemptions, plus the standard deduction
  • Limitations on deductions, overview of capital gains and loses, plus electronic filing
  • Dividend and interest income, alimony, prizes, awards, scholarships, and annuities
  • Accident, health, and life insurance, meals, and lodging
  • Social security benefits, employee fringe benefits, and unemployment compensation

Module II – Business Expenses, Retirement Plans, Self-Employed and Employee Expenses
The difference between deductions for versus from AGI can mean a significant addition or subtraction from taxable income. Rental and vacation properties have their own sets of rules for taxation; the general treatment of passive income and losses can help minimize costs and penalties. Qualified retirement accounts and IRA contribution limits change on a regular basis—maximization can save tax dollars with a resulting impressive nest egg. A series of miscellaneous costs and fees can collectively result in meaningful savings as well.

  • Rental income and expenses, passive loss limitations, and bad debts
  • IRAs, Keoghs, 401(k)s, pensions, profit-sharing plans, and rollovers
  • Classifying self-employment and employee expenses
  • Travel and transportation costs, home offices, and business gifts
  • Entertainment and educational expenses, dues, subscriptions, and publications

Module III – Itemized Deductions, Incentives, Credits, and Special Taxes
Medical insurance, drugs, capital expenditures, and health savings accounts are deductions that most taxpayers are unfamiliar with; personal property taxes are another unknown source for deduction. Write-offs are allowed for new businesses for the first few years, allowing the entrepreneur to take on risk with at least some guaranteed benefit. Social policy makes the cost of raising and educating a child more reasonable. More and more taxpayers are becoming subject to the AMT. Grasping its purpose and computation early can be rewarding.

  • Medical expenses, casualty and theft losses, taxes, interests, and contributions
  • Hobby losses, educational incentives, moving expenses, and miscellaneous deductions
  • Child and dependent care credits plus the earned income credit
  • Education tax credits, foreign tax credits, and energy credits
  • The alternative minimum tax and unearned minor income

Module IV – Accounting Periods and Depreciation Methods
Only a modest percentage of all taxpayers have a choice in selecting the accounting period in which liability is determined. However, quite a bit of latitude is allowed when it comes to depreciation and the election to expense. The methods of car depreciation favor domestic automakers, but the two formulas used allow the taxpayer the ability to maximize such deductions. Qualification of "good will" can result in creative planning opportunities.

  • Individual vs. partnership and corporate tax years, accounting methods, and restrictions
  • Traditional and MACRS depreciation, real estate, and election to expense
  • Luxury automobiles, intangibles, related parties, and unpaid expenses and interest

Module V – Capital Gains and Losses
The capital gains and losses section of a tax return are rarely audited. The IRS relies on taxpayers to honesty and accurately reported the adjusted basis. Most of your clients are confused about like-kind exchanges, resulting in frustration. There are a number of provisions that allow deferral or non-recognition of gain or loss when disposing of an asset. Installment sales are not used frequently or effectively given the tremendous tax planning opportunities allowed.

  • Defining what is a capital asset, holding periods, and gain or loss calculations
  • Sales, exchanges, amounts realized, and adjusted basis
  • Net capital gains, ordering rules, depreciation recapture, and Section 1231 vs. 1250
  • Unrecaptured real estate depreciation, property plus casualty gains and losses
  • Installment sales, like-kind exchanges, involuntary conversions, and personal residence sale

Module VI – Estimated Payments, Payroll Taxes, Administration, and Tax Planning
Employer and employee tax forms are considered a nuisance by many, but the potential penalties and interest charges make this a favorite target by the IRS and regulatory agencies alike. Reporting requirements can be easily dealt with using a simple system or an outside service. Investors breathe a sigh of relief once they know the chances of audit and the statute of limitations; however, the question of fraud has no timeline.

  • Methods of withholding, estimating payments, plus FICA and FUTA taxes
  • Federal tax deposit system, employer reporting requirements, plus self-employment taxes
  • The nanny tax, overpayment of FICA, and backup withholding
  • The IRS, record examination, audit process, selection of returns for audit, and appeals
  • Interest and penalty charges, failure to file or pay, and the accuracy-related penalty
  • Fraud, statute of limitations, burden of proof, privileges, and taxpayer bill of rights
  • Tax planning, rate terminology, tax traps, and examples of effective planning