1. COMMUNITY PROPERTY
Upon completion of this chapter, students will understand community property, community income, and separate property. Students will be able to determine how community and separate income should be reported in a community property state, regardless of whether the taxpayer lives in a community or separate property state. In addition, students will determine how filing a separate return impacts federal and California exemptions, deductions, taxable income, and credits. Students will learn how to report state taxes withheld from California and other states. Lastly, students will be able to identify certain situations where prenuptial agreements are not enforceable.
2. RETIREMENT INCOME AND OTHER INCOME TYPES
Upon completion of this chapter, students will understand the differences in how retirement and other income distributions are taxed by California compared to federal law. Students will be able to identify the differences and report the necessary adjustments to California taxable income.
Upon the completion of this chapter, students will be able to determine whether a taxpayer is a resident, a part-year resident, or a nonresident of California for tax purposes. They will recognize when the safe harbor “rule” applies to taxpayers domiciled in California. Students will understand how an individual’s residency status determines the manner in which California taxes income and which form to use. Finally, students will understand the residency rules which apply to military servicemembers and their spouses domiciled in and outside California.
Upon completion of this chapter, students will understand how the differences between California and federal depreciation and amortization can affect the basis of property, depreciation deductions, and business expenses, thereby affecting business income (loss), capital gains (losses), and other items on the California tax return. Students will learn how to calculate California depreciation amounts and report differences from federal amounts on Schedule CA (540 or 540NR). Students will be able to determine if and what amount of the cost of property placed in service during the taxable year may be expensed.
5. SELF-EMPLOYMENT INCOME
Upon completion of this chapter, students will understand the differences in the calculation of self-employment income between California and federal tax law. Students will recognize when a basis or business deduction adjustment is necessary on the California return. Students will be introduced to business credits available to self-employed individuals. Students will learn the reporting rules of NOL carryforwards and carrybacks. Students will be able to apply Employment Development Department (EDD) guidelines to determine whether a worker is an employee or an independent contractor and understand specific statutes that define who is a statutory employee. Finally, students will learn about independent contractor reporting requirements.
6. CALIFORNIA BUSINESS ENTITIES
Upon completion of this chapter, students will understand the different types of California business entities as they relate to filing a California tax return. Common business tax law concerns regarding topics such as NOLs, nonresident withholding, employee versus contractor issues, and statutory employees are included in this Chapter. Students will be able to describe employer registration and reporting requirements as they relate to the Employment Development Department (EDD). Finally, students will identify an employer and recognize the various kinds of employment taxes employers are required to withhold from employees.