Comprehensive Tax Course - California Edition

Hours: 60 / Access Length: 6 Months / Delivery: Online, Mentor Supported

Course Overview:

Upon successful completion of this course, students will be able to prepare most individual tax returns including Schedules C, D, and E. The California edition allows the student to register with CTEC as a tax preparer (additional requirements apply).

Course Outline:

Chapter 1 – General Overview

1. Determine who should file a tax return.
2. Identify filing requirements for most taxpayers.
3. Identify filing requirements for dependents.
4. Discuss the Tax Cuts and Jobs Act of 2017 and other recent legislative updates.
5. Discuss Form 1040 and the three numbered schedules that accompany the form.
6. Discuss the new Form 1040-SR for Seniors.
7. Determine when, where, and how to file; then, choose the method of payment.
8. Summarize accounting periods and methods.
9. Discuss the requirement for a correct Social Security number or taxpayer identification number when filing a tax return.
10. Identify the correct filing status for taxpayers.
11. Determine if the taxpayer is a resident or nonresident alien.
12. Discuss the importance of the Path Act.
13. Describe the information presented on the taxpayer’s W-2 form.
14. Discuss Paid Preparer Penalties and Responsibilities.
15. Provide an overview of the tax return filing process.

Chapter 2 - Standard Deduction and Dependents

1. Calculate the standard deduction and determine when to use it.
2. Define what constitutes a dependent and identify when the taxpayer can claim a dependent.
3. Summarize the tests for determining when a dependent is a qualifying child or a qualifying relative.
4. Determine support provided to a potential dependent.
5. Describe the steps necessary to file a decedent’s tax return.
6. Identify the rules for tax withholding and estimated payments and tax return assembly order and processing.

Chapter 3 – Income

1. Identify various types of employee compensation, including fringe benefits and tips.
2. Discuss business income, including income from farming, rentals, and bartering.
3. Discuss alimony received as taxable income.
4. Summarize other types of income that may be fully or partially taxable, such as savings and
5. investment income, unemployment compensation, and Social Security benefits.
6. Summarize the general rules of community property.
7. Compute taxable and nontaxable income.

Chapter 4 – Interest and Dividends

1. Identify the different types of interest income.
2. Summarize the difference between taxable and nontaxable interest.
3. Examine the tax reporting of interest income.
4. Discuss dividend income and nontaxable distributions.
5. Compute the “kiddie” tax.

MODULE 2

Chapter 5 – Earned Income Credit

1. Examine the most common tax credit, the earned income credit (EIC).
2. Define earned income as it relates to the earned income credit.
3. Identify the eligibility rules for the earned income credit that apply to everyone.
4. Summarize the additional eligibility rules that apply to taxpayers with a qualifying child.
5. Describe how taxpayers without children may qualify for the earned income credit.
6. Determine how to complete Schedule EIC and where to put the information from the appropriate worksheet on Form 1040.
7. Discuss circumstances when the IRS would disallow the earned income credit.
8. Examine IRS due diligence requirements.
9. Recognize when special rules apply to a taxpayer claiming the earned income credit.

Chapter 6 – Tax Credits

1. Examine rules for claiming the child tax credit (CTC), the credit for other dependents (ODC), and the additional child tax credit (ACTC).
2. Review the qualifications for claiming the credit for child and dependent care expenses.
3. Summarize the qualifications for claiming the credit for the elderly or the disabled.
4. List the qualifications for claiming the adoption credit.
5. Differentiate between the two education credits.
6. Discuss the due diligence requirements paid preparers must comply with when claiming the EIC, the CTC/ACTC/ODC, the AOTC, and/or Head of Household filing status.
7. Summarize the recovery rebate credit and employee retention tax credit.
8. Explore other less common credits.

Chapter 7 – Retirement Income and Other Income Types

1. Recognize retirement income, including distinguishing between pensions and annuities.
2. Discuss specific types of pension plans, including SEP and SIMPLE plans, traditional and ROTH IRAs, qualified plans, and federal civil service retirement, along with distributions from such plans which are reported on Form 1099-R (Form CSA 1099-R for federal civil service).
3. Discuss government retirement benefit programs; specifically, Social Security and railroad retirement and the applicable reporting forms (Forms SSA-1099, RRB-1099, and RRB-1099-R).
4. Summarize where to report various types of income.

Chapter 8 – Adjustments to Income

1. Explain the applicability and reporting of the educator and moving expense adjustments as they
2. relate to employment.
3. Discuss the required reporting of the three business-related adjustments.
4. Review the required reporting of the retirement-related adjustments for self-employed and individual taxpayers.
5. Explain the applicability and reporting of the adjustments related to education expenses.
6. Determine when a deduction can be taken for a Health Savings Account, penalty on early withdrawal of savings, or alimony as they apply to the individual taxpayer.
7. Identify the other less common adjustments, which, if applicable, will be included as part of the totals on Schedule 1 (Form 1040).

MODULE 3

Chapter 9 – Itemized Deductions

1. Determine whether standard or itemized deductions are the most advantageous for the taxpayer.
2. Explain eligible medical expenses and cite examples.
3. Identify which items qualify as deductible taxes.
4. Determine the types of interest which qualify as an itemized deduction.
5. Recognize what constitutes a deductible charitable contribution and understand when Form 8283 is required.
6. Review other deductions and their limitations.

Chapter 10 – Filing Tax Returns

1. Identify the rules and regulations governing electronic filing.
2. Describe the various methods of receiving a refund through electronic filing.
3. Identify the warning signs of taxpayer fraud.
4. Indicate the requirements for signing electronic returns.
5. Determine how to correct an electronic return rejected by the IRS.
6. Explain how to file an amended return.
7. Summarize tax extensions and installment agreements.
8. Describe the civil and criminal penalties applicable to taxpayers who do not comply with income tax laws.
9. Determine who is considered an injured spouse and who is considered an innocent spouse.

Chapter 11 – Capital Gains and Losses

1. Describe gains or losses from the sale of capital assets.
2. Explain capital gain distributions and their tax treatment.
3. Discuss the tax reporting of capital gains and losses on a tax return.
4. Determine the basis of property in various circumstances.
5. Describe the tax treatment for potential gains on the sale of a home or personal residence.
6. Examine the tax treatment for an installment sale.
7. Discuss the classification of property for virtual currency.

Chapter 12 – Depreciation and Disposition of Business Property

1. Classify the different types of property eligible for depreciation.
2. Define the terminologies unique to depreciation transactions.
3. Differentiate between various depreciation methods.
4. Compute the section 179 deduction and special depreciation allowance.
5. Summarize the appropriate reporting of dispositions of business property.
6. Discuss specific guidelines related to the final repair regulations.

MODULE 4

Chapter 13 – Self Employment Income

1. Indicate when the taxpayer is considered a sole proprietor.
2. Calculate gross income on Schedule C.
3. Determine what types of business expenses may be deducted directly from gross income on
4. Schedule C.
5. Discuss rules to claim travel, gift, meal, and entertainment expenses.
6. Describe the requirements for deducting self-employed health insurance and retirement plan
7. contributions.
8. Review methods for calculating the auto expense deduction.
9. Discuss circumstances that would allow a self-employed taxpayer to claim a deduction for office in-home.
10. Calculate net profit or loss on Schedule C.
11. Identify other taxes a self-employed taxpayer may be required to pay.
12. Calculate the qualified business income deduction available under Section 199A.

Chapter 14 – Rental Property

1. Determine rental income and proper reporting of that income.
2. Summarize the types of deductible rental expenses.
3. Determine the nuances of renting vacation homes and other dwelling units.
4. Define the limits on rental and passive activity losses.
5. Describe the rules for reporting rental property sales.
6. Identify the proper reporting of other types of supplemental income, such as royalty and partnership income.
7. Discuss the qualified business income (QBI) deduction as it relates to rental properties.

Chapter 15 – Federal Tax Law Updates (2022/2023)

1. Summarize inflation adjustments for individual provisions.
2. Summarize inflation adjustments to above-the-line deductions.
3. Discuss the pass-through business deduction for qualified business income and Forms 8995 and 8995-A.
4. Summarize inflation adjustments to credits.
5. Summarize inflation adjustments to itemized deductions and exclusions.
6. Describe recent tax law changes for taxpayers.
7. Discuss Social Security, retirement plan, and IRA updates.
8. Discuss cost recovery and other provisions affecting businesses.
9. Indicate the status of federal tax extenders.

Chapter 16 – Ethics & Responsibilities of Tax Professionals

1. Describe the professional responsibilities in tax return preparation.
2. Discuss IRS rules as defined in Circular 230.
3. Identify the AICPA Statements on Standards for Tax Services (SSTS).
4. Discuss tax preparer regulations.
5. Explain the IRS Annual Filing Season Program (AFSP) and determine who is exempt.

California Supplement:

Chapter 1

• Determine who must or should file a return and which California form to use.
• Determine the taxpayer’s California residency status.
• Identify which filing status the taxpayer should use.
• Identify return due dates, discuss how to assemble a return, and describe the extension process.

Chapter 2

• Determine how to calculate the standard deduction and when to use the standard deduction.
• Identify what constitutes an exemption and when the taxpayer can claim an exemption credit.
• Identify credits unique to the California taxpayer, such as special Head of Household credits and excess CASDI credit.
• Determine when estimated tax payments are required, examine taxpayer penalties and statutes of limitation, and discuss taxpayer issues regarding extensions of time to file.

Chapter 3

• Summarize how adjustments are made to federal AGI to arrive at California AGI.
• Describe how California income tax law affects several types of income, either included in or omitted from federal income, and determine how to report the necessary adjustments on California Schedule CA (540), Part I.

Chapter 4

• Discuss the reporting of different types of taxable and nontaxable interest.
• Describe the reporting of dividend income and nondividend distributions.
• Identify the methods used to report a child’s investment income.

Chapter 5

• Identify the differences between community property and separate property.
• Report income, deductions, and credits when filing a separate return.
• Determine the classification of property when moving to or from other states.
• Identify when a credit is allowed for state taxes withheld.
• Recognize the validity of prenuptial agreements.

Chapter 6

• Summarize the differences between the federal and California Child and Dependent Care Credit and how to report the difference.
• Describe the availability of the College Access Credit.
• Identify who may claim the Child Adoption Credit and which costs may be used to determine the amount of credit.
• Determine who is eligible to claim the California Earned Income Tax Credit and how to calculate the credit. Also determine when a taxpayer qualifies for the Young Child Tax Credit.
• Recognize when a credit for excess California SDI or VPDI withheld may be claimed.
• Determine who is eligible to claim the New Employment Credit and how to calculate the credit.
• Determine when a taxpayer qualifies for the Nonrefundable Renter’s Credit.
• Describe who qualifies for the Credit for Joint Custody Head of Household, Credit for Dependent Parent, and Credit for Senior Head of Household.
• Review the Other State Tax Credit for taxpayers with double-taxed income.
• Recognize California credits that have been repealed, have carryover provisions, and/or are subject to recapture as well as the overall business credit limitations.

Chapter 7

• Summarize the differences between federal and California tax law for distributions from pensions, annuities, IRAs, and HSAs.
• Identify when and how to adjust for Social Security and Railroad Retirement benefits reported on the federal return.
• Recognize when an adjustment is necessary on the California return for other types of federal taxable income.

Chapter 8

• Discuss adjustments to income on Schedule CA (540) for California residents.
• Explain adjustments to income reported on Schedule CA (540NR) in columns B and C for part-year residents and nonresidents.
• Determine amounts reported on Schedule CA (540NR) in columns D and E for part-year residents and nonresidents.
• Review the rules for retirement plan adjustments.

Chapter 9

• Determine whether standard or itemized deductions are the most advantageous for the taxpayer.
• Describe the overall limitation on itemized deductions.
• Determine what adjustments must be made to federal itemized deductions for California taxes on Schedule CA (540 or 540NR).

Chapter 10

• Determine a taxpayer’s California residency status.
• Recognize how California taxes residents, part-year residents, and nonresidents, and identify which form to use.
• Examine how residency rules apply to military servicemembers and their spouses.

Chapter 11

• Determine which expenses qualify as California employee business expenses.
• Differentiate between the standard mileage rate and the actual auto expense methods of figuring auto expenses.
• Indicate the conditions which must be met, and which expenses are deductible for the business use of a home.
• Discuss deductible travel, gift, and entertainment expenses.
• Summarize the treatment of political activity expenses.

Chapter 12

• Compare the federal and California tax treatment of the tuition and fees deduction.
• Calculate the student loan interest deduction on the federal and California returns.
• Determine when California educators can deduct educator expenses.
• Identify who is eligible to deduct work-related education expenses.
• Recognize how different education savings plans affect taxpayers.

Chapter 13

• Summarize the treatment of capital gains and losses on a California tax return.
• Describe the options for reporting capital gain distributions for children.
• Compute the potential gain on the sale of a home or personal residence.
• Describe the proper tax treatment of an installment sale.
• Explain what constitutes a like-kind exchange and how to report one.
• Calculate nonresident withholding on sales of real property.
• Summarize the differences between California and federal mortgage forgiveness debt relief provisions.

Chapter 14

• Discuss how California and federal depreciation have evolved over the years.
• Describe the purpose of Form FTB 3885A and how to report depreciation adjustments.
• Distinguish between federal and California depreciation methods and recovery periods.
• Recognize differences between federal and California tax law regarding property expensing, including the Section 179 deduction and listed property.
• Explain amortization adjustments to business property required by California law.
• Discuss specific guidelines of the final repair regulations and safe harbor as they relate to California and federal tax returns.

Chapter 15

• Discuss the California treatment of self-employment income and self-employment tax.
• Describe what adjustments need to be made to property basis and business deductions as a result of California’s nonconformity with federal tax law.
• Discuss credits available to employers.
• Demonstrate how to report NOL carryforwards and NOL carrybacks.
• Determine when withholding is required for payments made to nonresident independent contractors.
• Apply the “common law” test to determine when a worker is an employee and recognize California nonconformity to IRS Section 530 Relief for employers who have been incorrectly treating certain workers as independent contractors.
• Describe the difference between a statutory employee, a “common law” employee, and an independent contractor.
• Discuss reporting and withholding requirements for businesses.

Chapter 16

• Summarize the differences between California and federal rental real estate net income.
• Describe passive activity losses and loss limitations.
• Explain the consequences of noncompliance for substandard rental housing (SRH).
• Identify common taxpayer errors made when reporting a rental loss.
• Determine items of income and deductions from pass-through entities.

Chapter 17

• Identify when and how to complete and file an amended California income tax return.
• Recognize when estimated tax payments are required and how to make the payments.
• Differentiate between an innocent spouse and an injured spouse for California purposes.
• Describe an Offer in Compromise.
• Discuss how family support payments are enforced in California.
• Examine the interest and penalties associated with late payment of state income tax due and late filing of the California state tax return.
• Describe the process of obtaining an extension to file a California individual income tax return.
• Identify the California Voluntary Contribution Funds available on state tax returns.

Chapter 18

• Review which taxpayers are affected by the California Alternative Minimum Tax (AMT) and what factors may affect the calculation of AMT, and determine who qualifies to claim the credit for prior year AMT.
• Determine the California tax treatment for taxes paid to another state.
• Identify the forms associated with the Affordable Care Act.

Chapter 19

• Outline the purpose, responsibilities, and authority of the California Tax Education Council (CTEC).
• Describe the requirements necessary to become a CTEC Registered Tax Preparer (CRTP) and to maintain the designation in subsequent years.
• Summarize the Tax Preparer Code of Conduct and Responsibilities mandated for CRTPs.

Chapter 20

• Indicate who is required to register with CTEC and the requirements for those who do.
• Summarize Chapter 14, Sections 22250–22259, of the California Business and Professions Code.
• Describe professional responsibilities regarding disclosure of taxpayer information.

All necessary course materials are included.

System Requirements:

Internet Connectivity Requirements:

• Cable, Fiber, DSL, or LEO Satellite (i.e. Starlink) internet with speeds of at least 10mb/sec download and 5mb/sec upload are recommended for the best experience.

NOTE: While cellular hotspots may allow access to our courses, users may experience connectivity issues by trying to access our learning management system.  This is due to the potential high download and upload latency of cellular connections.   Therefore, it is not recommended that students use a cellular hotspot as their primary way of accessing their courses.

Hardware Requirements:

• CPU: 1 GHz or higher
• RAM: 4 GB or higher
• Resolution: 1280 x 720 or higher.  1920x1080 resolution is recommended for the best experience.
• Speakers / Headphones
• Microphone for Webinar or Live Online sessions.

Operating System Requirements:

• Windows 7 or higher.
• Mac OSX 10 or higher.
• Latest Chrome OS
• Latest Linux Distributions
  

NOTE: While we understand that our courses can be viewed on Android and iPhone devices, we do not recommend the use of these devices for our courses. The size of these devices do not provide a good learning environment for students taking online or live online based courses.

Web Browser Requirements:

• Latest Google Chrome is recommended for the best experience.
• Latest Mozilla FireFox
• Latest Microsoft Edge
• Latest Apple Safari

Basic Software Requirements (These are recommendations of software to use):

• Office suite software (Microsoft Office, OpenOffice, or LibreOffice)
• PDF reader program (Adobe Reader, FoxIt)
• Courses may require other software that is described in the above course outline.