Five Classes focusing on: Understanding line-by-line the 1040 Personal Tax Return , Standard vs. Itemized Deductions, How Marital & Household Status Effects Taxes. How an Entrepreneur should calculate and report their Business Income, Home Office Deduction, Self-Employment Tax and Qualified Business Income Credit. How to Use the Tax Tables to Determine Tax Due, How To Avoid Penalties, and How to Project Estimated Taxes.
CLASS 1: READING A PAYROLL STUB AND W-2
- Payroll and Employment Forms (W-4 and I9)
- How to read a Payroll stub and W-2.
- Understanding Pay periods – weekly, Bi-Weekly, Semi-Monthly, and Monthly
- Salary vs Hourly, Overtime Rules and Special State Regulations
- Understand pre-tax contributions i.e., health insurance, 401 K, cafeteria plan Unemployment Insurance, Disability insurance, Paid Family Medical Leave, Transit Check, and other deductions
- What are Social Security and Medicare taxes and how are they calculated
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CLASS 2: 1099 EARNINGS, SCHEDULE C, AND HOME OFFICE DEDUCTION
- What is an independent contractor?
- What are the IRS reporting requirements for payments to independent contractors?
- How to prepare and read a 1099
- Pros and Cons to W-2 vs. 1099. IRS expenses categories.
- When is a 1099 required to be sent to an independent contractor
- Review of Schedule C, and setting up business bookkeeping to dovetail to IRS expense categories.
- Two methods to calculate the Home Office Deduction – Review Schedule 8829.
- Understanding and calculating self-employment tax – Review Schedule SE.
CLASS 3: CALCULATING 1040 PAGE 1 – PUTTING THE PUZZLE (TOGETHER)
- Transferring Business Income/Loss (Schedule C) and Self Employment Taxes (Schedule SE) to Schedules 1 and 2
- Entering all income on the 1040 Page 1 to Calculate Adjustable Gross Income (AGI)
- Where to enter W-2 earnings, Interest, and Dividends (Schedule B)
- Where to enter Interest and Dividneds
- Where to enter Other Income including Business Income
- Discuss the Standard Deduction vs Itemized Deductions (Schedule A),
- What is the Qualified Business Income Tax Credit and how is it calculated?
- How is Adjustable Gross Income calculated?
- How is Taxable Income Calculated?
CLASS 4: CALCULATING 1040 Page 2 – TOTAL TAX and TAX DUE
- Tackling the 1040 Page 2. – tax calculation.
- Review the tax tables.
- Understanding Marital Status as it relates to taxes.
- Calculate taxes due for various incomes.
- Understand the difference between marginal and effective tax rates.
CLASS 5: TAX QUESTIONS – and CALCULATING ESTIMATED TAXES
- Learn how to avoid a penalty for not remitting taxes throughout the year
- Discuss why homeownership expenses, such as mortgage interest and real estate taxes may not reduce your taxes
- How to project estimated taxes and the dates that estimated tax payments are due
- Filing an amended return
- Assessments for Penalties and Interest – what to do when you receive an Assessment
- Tax Payer Advocate’s Office
- Question and Answer – on any tax-related issue
Class #5’s agenda is flexible. Most groups need a fifth session to finish the above curriculum. When there is extra time, we discuss budgeting/forecasting and how to project taxes a year in advance.