CE Credits: 10 Federal Tax Law, 2 Regulatory Ethics, 6 AFTR
Deadline: LTP encourages you to complete this course by December 29th to allow time for reporting credits and any support. The IRS deadline to complete is December 31st*.
Our Annual Filing Season Program (AFSP) qualifies for 18 hours of continuing education needed to earn an AFSP Record of Completion from the IRS. Some of the perks a tax preparer will receive upon completion are: limited representation rights, a certificate directly from the IRS to display, and your name added to the official IRS tax preparer directory. Disponible en español: Haga clic aquí
To fulfill requirements, you must take the AFTR which consists of a 100 question, 3-hour timed exam and complete it with a score of 70% or better.
*The IRS deadline to complete this course is December 31st at midnight your local time, however, keep in mind our office closes on 12/31 at 5pm PST | 8pm EST | 6pm MT | 7pm CT. Hours that are completed by the IRS deadline will be reported on the following day.
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Part I: Ethics and Best Practices
This chapter will explain how to determine who qualifies as a tax return preparer, what representation rights a preparer has, how that individual is bound by the Circular 230 guidelines, and what it means for a tax preparer to behave ethically and responsibly.
Part 2: Federal Tax Law
The IRS has the authority to tax all income from whatever source it is derived. This includes compensation for services, gains from dispositions of property, interest and dividends, rent and royalties, pensions and annuities, gambling winnings, and even illegal activities. All such income a person receives is collectively referred to as “worldwide income.” However, not all money or property is taxable or subject to tax. This chapter will cover the different types of taxable and nontaxable income and show you where and how to report such wages on a professionally prepared tax return. A tax professional must recognize the different kinds of taxable income, tax-exempt income, and other income included in Schedule 1, line 21, and must know how to figure out the taxable percentage on Social Security benefits.
Tax Credits and Payments
A nonrefundable tax credit reduces the amount of tax liability that may have to be paid. Unlike a deduction, which reduces the amount of income that is subject to taxation, a credit directly reduces the tax itself. There are two types of credits: nonrefundable, which cannot reduce tax liability below zero, and refundable, which can reduce tax liability below zero, resulting in the need for a refund.
Other Taxes and Taxpayer Penalties
This chapter provides an overview of miscellaneous taxes from the Form 1040 and reported on Schedule 2 that a taxpayer might be assessed. This includes excess Social Security tax, additional taxes on IRAs, the Alternative Minimum Tax, and household employment taxes.
This chapter presents an overview of Schedule C, which includes income and expenses. The income or loss is reported on Form 1040, Schedule 1, line 3. Sole proprietorship is not a legal entity; it refers to a person who owns a business and is personally responsible for its debts. Sole proprietorship is a popular business structure due to the simplicity, ease of setup, and nominal startup costs. Ultimately, a sole proprietor would register the business name with the state and city, obtain local business licenses, and then open for business. A drawback of being a sole proprietor is that the owner is 100% personally liable for the business’s income and/or debt.
Part 3: Annual Federal Tax Refresher
The Annual Federal Tax Refresher (AFTR) course is intended to prepare the individual for the upcoming tax year. This course covers the latest tax law changes and current tax issues, as well as practice and professional responsibility. This course follows the 3 domains that are set annually by the IRS. They include:
- New Tax Law/Recent Updates
- General Review
- Practices, Procedures and Professional Responsibility
At the end of this section, the student will be able to do the following:
- Understand limited representation rights.
- Recognize the annual inflation rates for the standard deduction.
- Comprehend the difference between business vs hobby.
- Identify taxpayers who qualify for a federally declared disaster area.
How do I obtain an AFSP-Record of Completion?
- Take a six (6) hour Annual Federal Tax Refresher (AFTR) course that covers filing season issues and tax law updates, as well as a knowledge-based comprehension test administered at the end of the course by the CE Provider.
- Take ten (10) hours of other federal tax law topics; and
- Take two (2) hours of ethics.
- Have an active preparer tax identification number (PTIN).
- Consent to adhere to specific practice obligations outlined in subpart B and section 10.51 of Treasury Department Circular No. 230.
How and when will I get my Record of Completion?
- After PTIN renewal season begins in October, a Record of Completion will be generated to you once all requirements have been met, including renewal of your PTIN and consent to the Circular 230 obligations.
- If you have an online PTIN account, you will receive an email from TaxPro_PTIN@irs.gov with instructions on how to sign the Circular 230 consent and receive your certificate in your online secure mailbox.
- If you do not have an online PTIN account, you will receive a letter with instructions for completing the application process and obtaining your certificate.
Who is exempt from taking the AFSP course?
- Anyone who passed the RTRP test administered by the IRS between November 2011 and January 2013.
- Established state-based return preparer program participants with testing (Oregon, California, and Maryland).
- Those who have passed SEE (Special Enrollment Exam) Part 1 within the past 2 years.
- VITA/TCE volunteers: quality reviewers and instructors with active PTINs.
- Other accredited tax-focused credential holders such as the following:
- The Accreditation Council for Accountancy.
- Taxation’s Accredited Business Accountant/Advisor (ABA).
- Accredited Tax Preparer (ATP).
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