US Individual Taxes
US Individual Taxes provides practical literacy for navigating the federal income tax system, covering Form 1040, filing statuses, deductions, tax brackets, withholding, estimated taxes, credits, retirement account tax treatment, capital gains, and basic state tax considerations. Learners develop the skills to understand their own tax returns and make informed tax-reducing decisions throughout the year.
Who Should Take This
This course is designed for US taxpayers who want to understand their own tax situation rather than just hand documents to a preparer, including employees, freelancers, and gig workers navigating W-2 and 1099 income. A basic understanding of personal finance is helpful but not required, and the course focuses on practical decision-making rather than professional tax preparation.
What's Included in AccelaStudy® AI
Adaptive Knowledge Graph
Practice Questions
Lesson Modules
Console Simulator Labs
Exam Tips & Strategy
13 Activity Formats
Course Outline
1Filing Basics and Form 1040 7 topics
Describe the purpose and structure of Form 1040 including the sequence from gross income to adjusted gross income (AGI) to taxable income to tax liability to refund or amount owed
Identify the five IRS filing status categories (Single, Married Filing Jointly, Married Filing Separately, Head of Household, Qualifying Surviving Spouse) and the key eligibility criteria and tax implications of each
Apply filing status selection to a given taxpayer scenario by identifying the correct status, the resulting standard deduction, and the applicable tax bracket thresholds for that status
Identify IRS filing deadlines including the April 15 original due date, the automatic 6-month extension to October 15 (Form 4868), and the distinction between an extension of time to file versus an extension of time to pay
Apply the gross income threshold rules to determine whether a taxpayer is required to file a federal return based on their income amount, filing status, and age
Analyze the strategic choice between filing Married Filing Jointly versus Married Filing Separately for a couple where one spouse has significant medical expenses or student loan income-driven repayment obligations
Apply amended return procedures by identifying common errors that warrant filing Form 1040-X (omitted income, missed credits, incorrect filing status), noting the 3-year statute of limitations for refund claims and 6-year statute for substantial underreporting
2Income Types: W-2 and 1099 7 topics
Describe Form W-2 boxes including Box 1 (wages and tips), Box 2 (federal income tax withheld), Box 3 and 4 (Social Security wages and tax), Box 5 and 6 (Medicare wages and tax), and Box 12 codes for common pre-tax benefits
Identify the primary 1099 form types including 1099-NEC (non-employee compensation, self-employment income), 1099-INT (interest income), 1099-DIV (dividends), and 1099-B (brokerage proceeds) and explain which forms are included in gross income
Apply self-employment tax rules by calculating the 15.3% SE tax (12.4% Social Security up to the wage base plus 2.9% Medicare) on net self-employment income and applying the above-the-line deduction for half of SE tax
Analyze the tax difference between employee classification (W-2) and independent contractor status (1099-NEC) including self-employment tax burden, deductible business expenses, quarterly estimated tax obligations, and lack of employer-sponsored benefits
Apply Schedule C deduction rules for self-employed individuals by identifying deductible business expenses including home office (regular and exclusive use), vehicle use (mileage rate or actual expenses), professional development, and equipment under Section 179 expensing
Identify passive income tax treatment for rental income, limited partnership distributions, and royalties including the passive activity loss rules that generally restrict deducting passive losses against ordinary income with exceptions for active real estate participation
Apply Social Security benefit taxation rules by calculating combined income (AGI plus non-taxable interest plus one-half of Social Security benefits) and determining that 0% of benefits are taxable below $25,000 single ($32,000 MFJ), up to 50% are taxable between $25,000-$34,000 single ($32,000-$44,000 MFJ), and up to 85% above those thresholds
3Deductions: Standard and Itemized 7 topics
Describe the standard deduction as a flat dollar amount subtracted from AGI before calculating taxable income and identify approximate current-year amounts for each filing status (single ~$14,600, MFJ ~$29,200 for 2024)
Identify the main itemized deductions including state and local taxes (SALT capped at $10,000), mortgage interest on the first $750,000 of qualified residence debt, and charitable contributions (cash and non-cash) and explain when itemizing exceeds the standard deduction
Apply the itemize-versus-standard-deduction decision by summing eligible itemized deductions and comparing to the standard deduction to determine which reduces taxable income more for a given filing status
Identify common above-the-line deductions (adjustments to income) that reduce AGI regardless of whether the taxpayer itemizes, including student loan interest up to $2,500, HSA contributions, IRA deductions, and self-employed health insurance premiums
Apply above-the-line deductions to reduce AGI in a sample taxpayer scenario and explain why reducing AGI provides a double benefit by lowering taxable income and potentially qualifying the taxpayer for phase-out-limited deductions and credits
Apply the charitable contribution deduction strategy of bunching multiple years of charitable gifts into a single year using a donor-advised fund to exceed the standard deduction threshold in alternating years
Describe the qualified business income (QBI) deduction under Section 199A allowing eligible self-employed individuals and pass-through business owners to deduct up to 20% of qualified business income subject to income limitations and specified service trade restrictions
4Tax Brackets and Marginal Rates 8 topics
Describe the US progressive tax system by explaining that marginal tax rates (10%, 12%, 22%, 24%, 32%, 35%, 37%) apply only to income within each bracket and that the marginal rate is not the rate applied to all income
Calculate federal income tax liability for a given taxable income by applying the correct marginal rates to each portion of income within the corresponding bracket thresholds for the specified filing status
Distinguish marginal tax rate (rate on the last dollar earned) from effective tax rate (total tax divided by total taxable income) and explain why the effective rate is always lower than the marginal rate in a progressive system
Analyze the tax impact of an income increase that pushes a taxpayer into a higher bracket and debunk the myth that earning more money results in less take-home pay by demonstrating that only the incremental income is taxed at the higher rate
Apply the FICA tax calculation for an employee by computing 6.2% Social Security tax on wages up to the annual wage base ($168,600 in 2024) and 1.45% Medicare tax on all wages plus the 0.9% Additional Medicare Tax on wages above $200,000 single ($250,000 MFJ)
Describe the alternative minimum tax (AMT) as a parallel tax system that eliminates certain deductions and exemptions to ensure high-income taxpayers pay a minimum percentage of income and explain that the AMT primarily affects those with large SALT deductions or incentive stock options
Apply tax bracket optimization strategies including recognizing the value of filling lower brackets with income (Roth conversions, capital gain realizations, or IRMAA-safe Roth conversions) in years where AGI is unusually low due to job loss, retirement, or a business loss
Identify the kiddie tax rule applying the parents' marginal tax rate to a dependent child's unearned income above $2,500 (in 2024) to prevent income shifting to children in lower brackets and explain its implications for custodial accounts and UGMA/UTMA accounts
5Withholding and Estimated Taxes 5 topics
Describe the W-4 form and how the withholding allowances, filing status, and additional withholding elections on the W-4 determine the amount of federal income tax withheld from each paycheck
Apply W-4 adjustment strategies to align annual withholding with expected tax liability, including increasing withholding after marriage, a second job, or major deduction changes to avoid underpayment penalties
Describe the quarterly estimated tax payment system (Form 1040-ES) for self-employed individuals and those with significant non-wage income and explain the underpayment penalty safe harbors: pay 90% of current-year tax or 100% of prior-year tax
Apply estimated tax calculation for a self-employed taxpayer by combining self-employment tax and income tax, dividing by four, and scheduling quarterly payments on the IRS due dates (April 15, June 15, September 15, January 15)
Analyze the refund versus underpayment trade-off by explaining that a large refund represents an interest-free loan to the government while an underpayment generates a penalty and evaluate the optimal withholding target of breaking even within $1,000 in either direction
6Tax Credits 7 topics
Distinguish tax credits from tax deductions by explaining that credits reduce tax liability dollar-for-dollar while deductions reduce taxable income and are worth only the marginal rate percentage to the taxpayer
Describe the Earned Income Tax Credit (EITC) as a refundable credit for low-to-moderate-income workers including eligibility requirements based on earned income, investment income limits, filing status, and number of qualifying children
Apply Child Tax Credit rules including the $2,000 per qualifying child credit (partially refundable up to $1,700 as the Additional Child Tax Credit), the phase-out thresholds for high-income filers, and the age and dependency requirements
Describe the American Opportunity Tax Credit (AOTC) providing up to $2,500 per eligible student for the first four years of higher education and the Lifetime Learning Credit (LLC) providing up to $2,000 per return for all years and identify key differences in eligibility, refundability, and phase-out ranges
Apply credit eligibility screening to a taxpayer scenario to determine which credits are available, estimate their value, and identify whether the credit is refundable (generates a refund beyond zero tax liability) or nonrefundable
Describe the Saver's Credit (Retirement Savings Contributions Credit) providing a nonrefundable credit of 10-50% on up to $2,000 of retirement contributions for low-to-moderate income taxpayers and explain how it creates a compounded incentive for low-income earners to start saving
Apply the Child and Dependent Care Credit for expenses of up to $3,000 for one qualifying person ($6,000 for two or more) paid to enable the taxpayer and spouse to work or look for work and calculate the credit percentage based on adjusted gross income
7Retirement and Investment Tax Treatment 8 topics
Describe how traditional IRA and 401(k) contributions reduce current-year taxable income (pre-tax) while Roth IRA and Roth 401(k) contributions are made with after-tax dollars but grow and are withdrawn tax-free
Apply the traditional versus Roth contribution decision framework by comparing current marginal tax rate to expected retirement marginal tax rate and choosing traditional when the current rate is higher and Roth when the current rate is lower
Describe the capital gains tax rate structure applying 0%, 15%, or 20% on long-term capital gains based on taxable income thresholds (a 0% rate applies to taxpayers in the 10% and 12% income tax brackets) and explain how this affects investment withdrawal sequencing in retirement
Analyze the tax diversification strategy of holding pre-tax (traditional), after-tax (Roth), and taxable brokerage assets to provide flexibility in managing taxable income in retirement and optimize Social Security taxation and Medicare IRMAA surcharges
Apply Roth conversion planning concepts by identifying low-income years where converting traditional IRA funds to Roth within a lower bracket results in permanently tax-free growth and avoids future required minimum distributions
Describe the net investment income tax (NIIT) of 3.8% applying to the lesser of net investment income or the amount by which modified AGI exceeds $200,000 single ($250,000 MFJ) and identify which income types (dividends, capital gains, rental income, passive income) are included
Apply cost basis tracking methods for securities sold in a taxable brokerage account by selecting FIFO (first-in, first-out), specific identification, or average cost basis and explain how specific identification enables tax-loss harvesting by choosing the highest-cost shares to sell first
Describe the home sale exclusion allowing a taxpayer to exclude up to $250,000 ($500,000 MFJ) of capital gain from selling a primary residence if they owned and used the home as their main residence for at least 2 of the 5 years before the sale and have not used the exclusion in the past 2 years
8State Taxes and Tax Planning 11 topics
Describe the diversity of state income tax systems including states with no income tax (TX, FL, NV, WA, and four others), flat-rate states, and progressive-rate states and explain how state taxes interact with the federal SALT deduction cap
Apply multi-state tax filing rules by identifying when a taxpayer must file in multiple states due to working or earning income in a state other than their domicile state and explaining the credit for taxes paid to another state mechanism
Apply year-end tax planning strategies including maximizing pre-tax retirement contributions, accelerating deductible expenses into the current year, realizing capital losses to offset gains, and making estimated fourth-quarter payments before year-end
Analyze the total state-plus-federal marginal tax rate for a taxpayer in a high-income-tax state (e.g., California top rate 13.3%) and evaluate how state taxes affect the relative value of traditional versus Roth contributions and the choice to invest in municipal bonds
Apply tax record retention rules by identifying documents to keep for 3 years (returns and supporting documents when all income is reported), 6 years (returns where substantial income is omitted), and indefinitely (returns that were never filed, property records, and retirement account basis records)
Describe the difference between tax avoidance (legal tax minimization through deductions, credits, and account strategies) and tax evasion (illegal under-reporting or non-filing) and explain the IRS audit triggers including mathematical errors, large deductions, and non-reported 1099 income
Apply a tax-efficient charitable giving strategy by donating appreciated securities held more than one year directly to a charity or donor-advised fund to avoid capital gains tax on the appreciation while deducting the full fair market value as a charitable contribution
Describe health savings account (HSA) triple tax advantage: contributions are deductible above the line, growth is tax-free, and qualified medical withdrawals are tax-free; identify the 2024 limits of $4,150 for self-only and $8,300 for family coverage; and explain that after age 65, non-medical HSA withdrawals are taxed as ordinary income without penalty like a traditional IRA
Apply flexible spending account (FSA) forfeiture rules by calculating how much to contribute based on predictable annual medical and dependent care expenses, recognizing the use-it-or-lose-it provision with a $640 rollover allowance, and identifying eligible expenses to spend down the balance before year-end
Analyze the decision to work with a CPA, tax professional, or use DIY tax software by evaluating the complexity factors that warrant professional help: self-employment income, rental properties, multiple states, stock options, foreign income, or a major life event (marriage, divorce, inheritance, home sale)
Apply the IRS Free File program eligibility check noting that taxpayers with AGI at or below $79,000 in 2024 can file federal returns for free using IRS-partnered software and identify VITA (Volunteer Income Tax Assistance) sites providing free in-person preparation for low-income, disabled, and non-English-speaking taxpayers
Scope
Included Topics
- Form 1040 overview and filing basics, filing status categories (single, MFJ, MFS, HOH, QSS) and their significance, standard deduction amounts by filing status, itemized deductions (SALT cap, mortgage interest, charitable contributions), above-the-line deductions (student loan interest, HSA, IRA, self-employed health insurance), marginal vs effective tax rates, 2024 federal tax brackets, W-2 income and box explanations, 1099 income types (1099-NEC, 1099-INT, 1099-DIV, 1099-B), withholding and W-4 adjustments, estimated quarterly taxes (Form 1040-ES), common tax credits (EITC, child tax credit, child and dependent care credit, education credits: American Opportunity, Lifetime Learning), retirement account tax treatment (traditional vs Roth contributions), capital gains tax rates, state vs federal income tax overview, IRS filing deadlines April 15 and extensions to October 15
Not Covered
- Business tax returns (Form 1120, 1120-S, 1065) and corporate tax law
- Estate and gift tax rules beyond basic annual gift exclusion awareness
- International taxation (FBAR, FATCA, foreign tax credit at depth)
- Tax preparer professional certification requirements (Enrolled Agent, CPA exams)
- Detailed depreciation schedules and cost segregation studies
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