Income, Deductions, and Donuts

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En provenance du cours de University of Illinois at Urbana-Champaign

U.S. Federal Taxation Capstone

4 notes

University of Illinois at Urbana-Champaign

U.S. Federal Taxation Capstone

4 notes

Cours 5 sur 5 dans Specialization U.S. Federal Taxation

The Capstone is the culminating project in the US Federal Tax Specialization. You will have the opportunity to combine the concepts and techniques obtained through all the courses in this specialization (Federal Taxation I: Individuals, Employees and Sole Proprietors, Federal Taxation II: Property Transactions of Business Owners and Shareholders, Taxation of Business Entities I: Corporations, and Taxation of Business Entities II: Pass-Through Entities) and apply them to a real world tax project. The Capstone project will be 3 weeks long. You must take the Capstone project class after taking all the other courses in this Specialization.

À partir de la leçon

Module 1: Capstone Overview & Income, Deductions & Donuts

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.

Income, Deductions, and Donuts4:48

Rencontrer les enseignants

Matthew Hutchens
Lecturer of Accountancy
Department of Accountancy

In this course, we're going to take the knowledge you have acquired

in your previous four courses on US Federal Taxation,

and apply those to a hypothetical client scenario.

In addition, we're also going to take a closer look at some of the

major recent tax law changes that occurred at the end of 2017.

This course will consist of three modules.

At the conclusion of module one and two,

you will have a short quiz.

At the conclusion of module three,

you will have a more open-ended question which will be graded by your peers.

So, let's go ahead and take a look at our client scenario.

Remember if at any point you have a question

or want to refer back to any of the four prior courses,

you can access those through Coursera.

You are a Certified Public Accountant at Illini LLP,

a public accounting firm.

Your clients, Annie and Bobby Jones,

have come to you with some questions about their tax return.

Annie and Bobby are married with two children.

During the tax year,

Annie was a partner in Angels LLP,

a local architecture firm.

Annie received a Schedule K1 from Angels,

showing her distributed share of the partnerships items.

To account for her partnership income,

Annie also made several estimated tax payments to

both the IRS and Illinois throughout the year.

Bobby spent the year employed as the bakery manager of a local grocery store.

Bobby received a form W-2 from the grocery store,

reporting his wages and taxes withheld.

In addition to working at the grocery store, Bobby,

who has always had a passion for breakfast pastries began

to experiment with creating his own specialty donuts.

Initially, Bobby would bake the donuts at home,

on the weekends, and provide them to his friends and neighbors free of charge.

While preparing donuts for just friends and family,

he didn't really keep track of any expenses related to his donut baking.

But eventually, based on the positive reviews he received,

he decided to ramp up the doughnut production and began

selling his donuts on Saturday mornings at the local farmers market.

Bobby also accepted a few special catering requests

on his off days from the grocery store.

Once donut production ramped up,

Bobby began using some accounting software to keep track of his income and expenses.

In addition to the work in architecture and baking,

the couple also receives some distributions

from investments they had made in a couple of start-up businesses.

First, they received a distribution from Craft Ice Incorporated,

which specialized in the delivery of artisanal ices

directly to customers' doorsteps as part of an ice of the Month Club.

But, much like the corporations ice business,

the distribution was liquidating.

Annie and Bobby also received a cash distribution from

another business they invested in, Panda Prints Incorporated.

A company that sells office supplies with designs of red pandas.

Finally, Bobby and Annie also made

the following additional payments during the tax year: they paid student loan interest,

they paid mortgage interest expense on their home,

they paid local real estate taxes on their home,

they made some cash contributions to a local public charity,

and then lastly, they made a cash contribution to their local public television station.

But for this one, in return,

they received a box set of all five seasons of their favorite reality television show,

cought in wars.

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