Federal Taxation I: Individuals, Employees, and Sole Proprietors

About this course: This course is the first course in a five-course US Federal Tax Specialization. It covers and focuses on the U.S. federal tax system as it relates to individuals, employees, and sole proprietors. Key concepts covered include gross income and items that are statutorily included or excluded in it, personal and business expenses that qualify as tax deductions, and the differing tax treatments for employees versus self-employed taxpayers. Unlike many other introductory courses in tax and as part of this course’s comprehensive wrap-up, learners will be provided with practical and tangible experience reporting both income and expenses on the main individual tax return used in the US, Form 1040. If you have enjoyed this course, consider enrolling in our online graduate Accounting program. The University of Illinois at Urbana-Champaign, consistently ranked as one of the nation's top three accounting programs, now offers a master’s in accounting at a very affordable tuition rate and is completely online. The iMSA is a full Master of Accountancy program and students graduate with an MS that is highly recognized. Try an open course or two, then apply for admission into the credit-bearing version as you may be eligible to take credit-bearing courses during the application process. If you are missing any prerequisites for the full degree, you can complete Coursera courses to demonstrate readiness and strengthen your application for the iMSA. For more information on this exciting iMSA online program, refer to this link: https://www.coursera.org/university-programs/imsa 

Who is this class for: This course is designed for learners who want to obtain an introductory knowledge of US Federal Taxation on individuals, employees, and sole-proprietors. While the foundations laid in this course are critical for those who seek a career within the accounting profession, they are essential for all who are in the field of business as taxes are often the largest single expense of most companies! Upon completion of this course you should have a good understanding of the theoretical and technical aspects of individual taxation.  

Created by:  University of Illinois at Urbana-Champaign

• Taught by:  Petro Lisowsky, PhD, CPA, Associate Professor of Accountancy

  College of Business: Department of Accountancy

Level Intermediate Commitment 6-8 hours/week Language English How To Pass Pass all graded assignments to complete the course. Coursework

Each course is like an interactive textbook, featuring pre-recorded videos, quizzes and projects.

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Connect with thousands of other learners and debate ideas, discuss course material, and get help mastering concepts.

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University of Illinois at Urbana-Champaign The University of Illinois at Urbana-Champaign is a world leader in research, teaching and public engagement, distinguished by the breadth of its programs, broad academic excellence, and internationally renowned faculty and alumni. Illinois serves the world by creating knowledge, preparing students for lives of impact, and finding solutions to critical societal needs.

Syllabus


WEEK 1


INTRODUCTION TO THE COURSE
In this module, you will become familiar with the course, your instructor and your classmates, and our learning environment. This orientation will also help you obtain the technical skills required to navigate and be successful in this course.


1 video, 4 readings, 1 practice quiz expand

1. Video: Course Overview and Meet Prof Lisowsky
2. Reading: Syllabus
3. Reading: About the Discussion Forums
4. Practice Quiz: Orientation Quiz
5. Reading: Update Your Profile
6. Discussion Prompt: Get to Know Your Classmates
7. Reading: Build a Learning Community with Social Media

MODULE 1: AN INTRODUCTION TO TAXATION



In this module, you will be introduced to the different kinds of taxes faced by U.S. Taxpayers and the U.S. Federal income tax structure. The origin of tax law and its constitutionality is discussed along with a brief history of the different changes in rates that have occurred since the 16th amendment was passed. Finally, we will discover what the three different sources of new tax laws are.


8 videos, 1 reading, 8 practice quizzes expand

1. Discussion Prompt: Make Connections to Topic
2. Reading: Module 1 Overview and Resources
3. Video: Taxes: An Introduction
4. Practice Quiz: Lesson 1.1 Knowledge Check
5. Video: The Tax Structure
6. Practice Quiz: Lesson 1.2 Knowledge Check
7. Video: The Tax Structure: Examples
8. Practice Quiz: Lesson 1.3 Knowledge Check
9. Video: Types of Taxes
10. Practice Quiz: Lesson 1.4 Knowledge Check
11. Video: Origins of Tax Law
12. Practice Quiz: Lesson 1.5 Knowledge Check
13. Video: Statutory Sources of Tax Law
14. Practice Quiz: Lesson 1.6 Knowledge Check
15. Video: Administrative Sources of Tax Law
16. Practice Quiz: Lesson 1.7 Knowledge Check
17. Video: Judicial Sources of Tax Law
18. Practice Quiz: Lesson 1.8 Knowledge Check

Graded: Module 1 Graded Quiz

WEEK 2


MODULE 2: COMPUTING THE TAX



In this module, we will take a deeper dive into each part of the U.S. Federal income tax structure, with a focus on what is included in Gross Income. We will learn how for-AGI deductions reduce gross income to generate Adjusted Gross Income, or AGI, and why AGI is an important number which determines the floors and ceilings of many from-AGI deductions. We will also discuss exemptions, and the rules for claiming Personal and Dependency Exemptions. We will wrap up the module with a discussion of the actual calculation of the tax as well as the filing status and the filing requirements.


6 videos, 1 reading, 6 practice quizzes expand

1. Reading: Module 2 Overview and Resources
2. Video: Gross Income
3. Practice Quiz: Lesson 2.1 Knowledge Check
4. Video: Deductions and AGI
5. Practice Quiz: Lesson 2.2 Knowledge Check
6. Video: Personal and Dependency Exemptions
7. Practice Quiz: Lesson 2.3 Knowledge Check
8. Video: Tax Calculation
9. Practice Quiz: Lesson 2.4 Knowledge Check
10. Video: Filing Status
11. Practice Quiz: Lesson 2.5 Knowledge Check
12. Video: Filing Requirements and Other Dependent Issues
13. Practice Quiz: Lesson 2.6 Knowledge Check

Graded: Module 2 Graded Quiz

WEEK 3


MODULE 3: GROSS INCOME



In this module, you will take a deeper dive into gross income, specifically regarding statutory inclusions. Congress, the Courts, and the IRS have specific rules on how certain income items are included as gross income. These rules provide clarification in situations where it is unclear whether money or property received should actually be included as income, such as unemployment compensation or social security benefits.


6 videos, 1 reading, 6 practice quizzes expand

1. Reading: Module 3 Overview and Resources
2. Video: Gross Income: Concepts
3. Practice Quiz: Lesson 3.1 Knowledge Check
4. Video: Accounting Methods
5. Practice Quiz: Lesson 3.2 Knowledge Check
6. Video: Accounting Method Exceptions
7. Practice Quiz: Lesson 3.3 Knowledge Check
8. Video: Gross Income I: Alimony, Discharge of Indebtedness, Annuities
9. Practice Quiz: Lesson 3.4 Knowledge Check
10. Video: Gross Income: Example
11. Practice Quiz: Lesson 3.5 Knowledge Check
12. Video: Gross Income II: Prizes, Life Insurance, Unemployment Compensation, Social Security Benefits
13. Practice Quiz: Lesson 3.6 Knowledge Check

Graded: Module 3 Graded Quiz

WEEK 4


MODULE 4: GROSS INCOME: EXCLUSIONS
In this module, you will take a deeper dive into gross income, specifically regarding statutory exclusions. Congress, the Courts, and the IRS allow exclusions of money or property received by the taxpayer for various reasons.


5 videos, 2 readings, 5 practice quizzes expand

1. Reading: Module 4 Overview and Resources
2. Reading: Sharing "Goodreads"
3. Video: Municipal Bond Interest, Gifts, Life Insurance Proceeds
4. Practice Quiz: Lesson 4.1 Knowledge Check
5. Video: Scholarships, Payments for Damages, Compensation for Injuries and Sickness
6. Practice Quiz: Lesson 4.2 Knowledge Check
7. Video: Meals and Lodging, Recovery of Capital Issues
8. Practice Quiz: Lesson 4.3 Knowledge Check
9. Video: Employee Fringe Benefits: Non-Discriminatory
10. Practice Quiz: Lesson 4.4 Knowledge Check
11. Video: Employee Fringe Benefits: Discriminatory
12. Practice Quiz: Lesson 4.5 Knowledge Check

Graded: Module 4 Graded Quiz

WEEK 5


MODULE 5: DEDUCTIONS AND LOSSES: IN GENERAL



In this module, you will learn about deductions, which is the term used in tax to describe an expense that is allowed to reduce a taxpayer’s tax liability. You will discover what Adjusted Gross Income is, why it is important, and how to calculate it. You will also learn the proper tax treatment of semi-profitable activities, such as hobbies.


8 videos, 1 reading, 8 practice quizzes expand

1. Reading: Module 5 Overview and Resources
2. Video: Deductions: For vs. From AGI
3. Practice Quiz: Lesson 5.1 Knowledge Check
4. Video: Trade or Business Deductions: Concepts
5. Practice Quiz: Lesson 5.2 Knowledge Check
6. Video: Timing of Deductions
7. Practice Quiz: Lesson 5.3 Knowledge Check
8. Video: Trade or Business Deductions: Political Contributions, Lobbying, Executive Compensation
9. Practice Quiz: Lesson 5.4 Knowledge Check
10. Video: Hobby Loss Deductions
11. Practice Quiz: Lesson 5.5 Knowledge Check
12. Video: Hobby Loss Deductions: Example
13. Practice Quiz: Lesson 5.6 Knowledge Check
14. Video: Vacation Home Rental Deductions
15. Practice Quiz: Lesson 5.7 Knowledge Check
16. Video: Vacation Home Rental Deductions: Example
17. Practice Quiz: Lesson 5.8 Knowledge Check

Graded: Module 5 Graded Quiz

WEEK 6


MODULE 6: DEDUCTIONS AND LOSSES: ITEMIZED VS BUSINESS



In this module, we turn our focus to expenses that qualify as from AGI deductions, also known as itemized deductions. We will wrap up the module by discussing some unique situations where deduction treatment is an exception to the general rules, such as losses on securities or the artificial deduction of the Domestic Production and Activities Deduction (DPAD), both of which are actually allowed to be taken as for AGI deductions.


6 videos, 1 reading, 6 practice quizzes expand

1. Reading: Module 6 Overview and Resources
2. Video: Itemized Deductions: Overview and Medical Expenses
3. Practice Quiz: Lesson 6.1 Knowledge Check
4. Video: Itemized Deductions: Taxes, Interest, and Charitable Contributions
5. Practice Quiz: Lesson 6.2 Knowledge Check
6. Video: Casualty and Theft Losses
7. Practice Quiz: Lesson 6.3 Knowledge Check
8. Video: Business Expenses: Bad Debts
9. Practice Quiz: Lesson 6.4 Knowledge Check
10. Video: Business Expenses: DPAD and NOLs
11. Practice Quiz: Lesson 6.5 Knowledge Check
12. Video: Worthless Securities and Small Business Stock
13. Practice Quiz: Lesson 6.6 Knowledge Check

Graded: Module 6 Graded Quiz

WEEK 7


MODULE 7: DEDUCTIONS: EMPLOYEE AND SELF-EMPLOYED EXPENSES



In this module, we discuss several unique situations where the same expense may or may not be deductible, dependent on the facts and circumstances surrounding the situation. To finish off this module, we’ll switch back to discussing income and situations where taxpayers can elect to delay recognition of income, such as saving for retirement, as well as situations where taxation of the annual earnings of those retirement savings are either deferred or permanently excluded from income.


6 videos, 1 reading, 6 practice quizzes expand

1. Reading: Module 7 Overview and Resources
2. Video: Introduction, Transportation and Travel Expenses
3. Practice Quiz: Lesson 7.1 Knowledge Check
4. Video: Moving and Education Expenses
5. Practice Quiz: Lesson 7.2 Knowledge Check
6. Video: Entertainment and Home Office Expenses
7. Practice Quiz: Lesson 7.3 Knowledge Check
8. Video: Retirement Plans and Traditional IRAs
9. Practice Quiz: Lesson 7.4 Knowledge Check
10. Video: Non-Deductible and Roth IRAs
11. Practice Quiz: Lesson 7.5 Knowledge Check
12. Video: IRA Basis and Rollovers
13. Practice Quiz: Lesson 7.6 Knowledge Check

Graded: Module 7 Graded Quiz

WEEK 8


MODULE 8: COMPREHENSIVE EXAMPLE
In this module, you will review the Comprehensive Example video and then learn to apply the concepts to a tax return problem.


1 video, 4 readings, 1 practice quiz expand

1. Reading: Module 8 Overview and Resources
2. Video: Comprehensive Example
3. Reading: Comprehensive Example Solution
4. Practice Quiz: Module 8 Knowledge Check
5. Reading: Module 8 Graded Tax Return Problem Instructions
6. Reading: Course Wrap-Up
7. Discussion Prompt: Final Reflection: I used to think ... Now I think

Graded: Unlock Comprehensive Example Solution
Graded: Graded Tax Return - Section 1 Gross Income
Graded: Graded Tax Return - Section 2 Deductions for AGI
Graded: Graded Tax Return - Section 3 Deductions from AGI
Graded: Graded Tax Return - Section 4 Exemptions, Taxes, and Credits
Graded: Graded Tax Return - Section 5 Payments and Refund