Introduction to Federal Income Tax Law 11272019 v1a NTTC Training ala NJ TY2019 1 NTTC Training ala NJ TY2019 2 Tax law basics Types of Income Deductions Credits Form 1040 and Schedules 13 ID: 774256
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Introduction to Federal Income Tax Law 11-27-2019 v1a NTTC Training ala NJ – TY2019 1
NTTC Training ala NJ – TY2019 2 Tax law basics Types ofIncomeDeductionsCreditsForm 1040 and Schedules 1-3 Training materials available Lesson Topics 11-27-2019 v1a
NTTC Training ala NJ – TY2019 3 All income is taxable Unless the law says it is notNo deduction is allowed Unless the law says it is No credit is allowed Unless the law says it is Tax Law Basics 11-27-2019 v1a
NTTC Training ala NJ – TY2019 4 Gross Income Minus adjustments = Adjusted gross Income Minus deductions = Taxable Income Tax Law Basics 11-27-2019 v1a
NTTC Training ala NJ – TY2019 5 Two types of income TaxableEarnedUnearnedNontaxable Earned Unearned Types of Income Pub 4012 Tab D 11-27-2019 v1a
NTTC Training ala NJ – TY2019 6 Taxable income Must be reportedSubject to taxNontaxable incomeMay be reportableExempt from tax Types of Income Pub 4012 Tab D 11-27-2019 v1a
NTTC Training ala NJ – TY2019 7 Examples of earned income: income received from workWagesSelf-employmentLong term disability payments prior to minimum retirement age Union strike benefits Types of Income 11-27-2019 v1a
NTTC Training ala NJ – TY2019 8 Examples of unearned income: income not produced from work Unemployment compensationInterest and dividends Capital gains Social security benefits Retirement income Schedule E rental income Scholarship incomeAlimony Types of Income 11-27-2019 v1a
NTTC Training ala NJ – TY2019 9 Adjustments and deductions reduce taxable income Two typesAdjustments to gross incomeItemized or standard deduction Types of Deductions 11-27-2019 v1a
NTTC Training ala NJ – TY2019 10 Credits reduce tax liability dollar for dollar Nonrefundable Limited to tax liability Cannot reduce tax liability below $0 Refundable Can reduce tax liability below $0 Entered in Other Payments section Form 1040 Types of Credits 11-27-2019 v1a
NTTC Training ala NJ – TY2019 11 Form 1040: Filing status, identity, and dependents Form 1040: Income, adjustments, and tax liability Additional income (on Schedule 1)Additional taxes (on Schedule 2) Nonrefundable credits, refundable credits, and payments (on Schedule 3) Form 1040 and Related Schedules 11-27-2019 v1a
NTTC Training ala NJ – TY2019 Form 1040, Page 1 top Filing Status and Identity Dependents 11-27-2019 v1a 12
NTTC Training ala NJ – TY2019 13 Form 1040, Page 1 bottom Income and Adjustments 11-27-2019 v1a
NTTC Training ala NJ – TY2019 14 Form 1040, Page 2 top Tax Liability Payments and Refundable Credits 11-27-2019 v1a
NTTC Training ala NJ – TY2019 15 Schedule 1 Additional Income Adjustments to Income 11-27-2019 v1a
NTTC Training ala NJ – TY2019 16 Schedule 2 Tax Other Taxes 11-27-2019 v1a
NTTC Training ala NJ – TY2019 17 Schedule 3 Nonrefundable credits Payments and refundable credits 11-27-2019 v1a
NTTC Training ala NJ – TY2019 18 IRS Resources linklearncertification.comForm 6674 – Certification Test and RetestPub 4491 – Training GuidePub 17 – Your Federal Income Tax for Individuals Tax Aide Resources Pub 4012 – Volunteer Resource Guide (modified) TaxSlayer Practice Lab – Sections 4 & 6 of HOME page NTTC Workbook – Practice Exercises Training Materials 11-27-2019 v1a
NTTC Training ala NJ – TY2019 19 Training exercises Practice exercisesQuizzes Available in Portal Library and by ordering through Portal NTTC Workbook 11-27-2019 v1a
Training Exercises Practice Exercises NTTC Training ala NJ – TY2019 20For Instructor to use in a classroom setting Contain all the core topics usually encountered on the Advanced Exam Separate Instructor Guide For counselors to reinforce/refresh knowledge and skill For counselors to demonstrate proficiency and meet certification requirements Two Types of Exercises 11-27-2019 v1a
NTTC Training ala NJ – TY2019 21 The Golden Book Primary reference tool during tax seasonModified NTTC version in Portal Library (Recommended) Volunteer Resource Guide 11-27-2019 v1a
NTTC Training ala NJ – TY2019 22 WWW.LINKLEARNCERTIFICATION.COM 11-27-2019 v1a
NTTC Training ala NJ – TY2019 23 Form 6744 contains all tests Counselors are required to pass three tests with 80% or betterVolunteer Standards of Conduct Intake/Interview and Quality Review Advanced Course Pay attention to wording on test questions VITA/TCE Volunteer Assistor’s Test/Retest 11-27-2019 v1a
NTTC Training ala NJ – TY2019 24 Questions… Comments… Introduction to Income Tax 11-27-2019 v1a