How to Study for Fed Income Tax? Forum

[ArmyOfficer]

Don't know where to start. IRC is a beast. Any ideas?

[Johann]

this is way to vague for anyone to help you. i would suggest starting with the class topics or a supplement if this is the best you can do.

[TheNextAmendment]

Step 1) Take a step back and mentally conceptualize the big picture:
Taxable Income (What is included or excluded in gross income?) - Above-the-line Deductions (most of the big deductions are ATL) = Adjusted Gross Income (AGI)
AGI - Below-the-line Deductions (Personal Exemptions + (Standard Deduction OR Itemized Deductions such as charitable donations and interest)) = Tax Due (arbitrary name)
Tax Due - Credits = Total Taxable Income
Total Taxable Income x Marginal Tax Rate = Total Tax Liability
Income / Total Tax Liability = Average Tax Rate

Step 2) Make separate lists detailing:
-What is included in income
-What is deductible
-What is a credit and is this specific one refundable
-2014 phaseout numbers and the current state of the AMT

Step 3) Get the basic concepts memorized.
-Taxpayer wants to defer tax payment due to time value of money
-Efficiency vs. Equity goals
-Tax system is used as an instrument for encouraging certain behavior (deduction for mortgage interest, exclusion of imputed income)

Step 4) Understand where the case law sits on the major issues (personal vs. business expenditure, business vs. capital, etc.)

DO NOT try and memorize the entire IRC or Regs. Federal Income Taxation was meant to cover the basics, not extreme oddities.

HTH

[bnghle234]

Step 1) Take a step back and mentally conceptualize the big picture:
Taxable Income (What is included or excluded in gross income?) - Above-the-line Deductions (most of the big deductions are ATL) = Adjusted Gross Income (AGI)
AGI - Below-the-line Deductions (Personal Exemptions + (Standard Deduction OR Itemized Deductions such as charitable donations and interest)) = Tax Due (arbitrary name)
Tax Due - Credits = Total Taxable Income
Total Taxable Income x Marginal Tax Rate = Total Tax Liability
Income / Total Tax Liability = Average Tax Rate

Step 2) Make separate lists detailing:
-What is included in income
-What is deductible
-What is a credit and is this specific one refundable
-2014 phaseout numbers and the current state of the AMT

Step 3) Get the basic concepts memorized.
-Taxpayer wants to defer tax payment due to time value of money
-Efficiency vs. Equity goals
-Tax system is used as an instrument for encouraging certain behavior (deduction for mortgage interest, exclusion of imputed income)

Step 4) Understand where the case law sits on the major issues (personal vs. business expenditure, business vs. capital, etc.)

DO NOT try and memorize the entire IRC or Regs. Federal Income Taxation was meant to cover the basics, not extreme oddities.

HTH

awesome! thanks for that

[MCFC]

I've heard that outlining the E&E brings success.

[SemperLegal]

Amazon has birds eye view tax maps from previous years for like 8 dollars. Between those and the few free charts Andrew Mitchell has on his site, I Became a tax nut. I even brought the huge poster to my final and unfolded it to look up the capital gains rules (we are allowed to resort to anything but the internet in my class).

Pillsbury (the firm, not the fat croissant) has a website with free charts as well, but iirc, they are best for corporate tax