2021 Annual Tax Season Update - Mirrors the IRS-AFTR (Course Id 1666)

Taxes - Taxes for Course Id 1666

Each year, income tax return preparation must take into account inflation-related changes to various limits and new tax laws. This CPA course will look at those changes and new laws. The 2021 Annual Tax Season Update course is designed to provide valuable information to persons preparing individual 1040 income tax returns reflecting clients’ 2020 income.  The Annual Tax Filing Season Update course discusses new tax law and recent updates for the 2021 filing season, provides a general tax review, and examines important rules governing tax return preparer ethics, practices and procedures.

NASBA QAS - Text - Technical - NASBA Registry - IRS Enrolled Agents - Registered Tax Return Preparers - 1666

Course Learning Objectives

• Identify the changes made to various requirements by the SECURE Act, including –
  o Traditional IRA contribution eligibility,
  o Traditional IRA and qualified plan lifetime required minimum distributions,
  o Qualified birth and adoption distributions,
  o Inherited IRA distribution requirements,
  o Taxation of a child’s unearned income,
  o Qualified Tuition Plan distributions, and
  o Deductions for unreimbursed medical expenses;
• Recognize the status of various tax extenders, including –
  o Reinstatement of the credit for nonbusiness energy property;
  o Tuition and fees deduction;
  o Itemized deduction for mortgage insurance premiums; and
  o Exclusion of cancellation of debt income from qualified principal residence indebtedness;
• Apply the inflation-adjusted and other limits to the proper preparation of taxpayers’ income tax returns;
• Recognize the federal income tax filing statuses and the criteria for their use;
• Identify the types of income that must be recognized;
• Apply the tax rules to the various credits and adjustments to income that are available to taxpayers;
• Recognize the penalties that may be imposed on a preparer for failing to meet ethical and practice standards in preparing tax returns; and
• Identify the duties and restrictions imposed on tax preparers under Circular 230.

Chapter 1
Recent Updates

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

Chapter 2
New Tax Law & Extenders

• Determine the maximum age for traditional IRA contributions;
• Describe the change in the required minimum distribution age for traditional IRAs and retirement plans;
• 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 –
  o Repayment of student loans, and
  o 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 –
  o Tax credits for non-business energy property,
  o Payment of tuition and fees,
  o Payment of mortgage insurance premiums, and
  o Cancellation of primary residence indebtedness.

Chapter 3
Individual Income Components

• 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

• 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

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

Chapter 6
General Income Tax Review I

• 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 –
  o apprenticeship program expenses,
  o elementary and secondary school tuition, and
  o 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 II

• 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 & Responsibility

• 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.

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