7-1 Project Two Speaker Notes

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Southern New Hampshire University *

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Murchison 1 7-1 Project Two: Speaker Notes Kristophor Murchison Southern New Hampshire University ACC-330 Sarah Margaret Messerer 10 December 2023

Murchison 2 7-1 Project Two: Speaker Notes Slide One Greetings. My name is Kristophor Murchison. As a junior accountant for this company, it is in my charge to speak with clients and determine what changes can be made in preparation for future tax returns. This will involve going over their current returns with them, then looking for ways they can lower the taxes due through applicable deductions and credits. I will be dividing this presentation into two parts, one for each client that I have spoken to and have done research. The first part is dedicated to our client Joanna Roman. The second part is dedicated to our client Malik Ali. Each part is segmented into equal parts, each explaining how tax laws may be applied to them, with in-depth analysis. Slide Two The next section of slides will be an exposition of the applicable tax references for our client, Joanna Roman. The explanation of the tax laws is in Title 26 of the United States Code (USC), titled Internal Revenue Code (IRC). Subtitle A refers to income taxes. Subtitle A, Chapter 1 explains normal taxes and surtaxes, while Subtitle A, Chapter 2 explains self-employment income taxes. The publication for the tax tables for Form 1040 will also be used to determine tax liability.

Murchison 3 Slide Three The client is not married and has no dependents, therefore the filing status for this client is determined to be single. This can easily be determined by using the Interactive Tax Assistant. Slide Four The client listed income from her business, Fashion Designs, LLC, via Schedule 1 with business expenses listed on Schedule C. Additional taxes were also assessed on Schedule 2. There was no non-taxable income. Slide Five Here, the client had the option of either taking the standard deduction or itemizing deductions. The client opted to take the standard deduction of $12,550 and had no charitable donations to be applied to taxable income. The client also filed Form 8995 to apply for the qualified business income deduction. Slide Six The client qualified for the Earned Income Credit. The client did not have to file Schedule EIC due to not having a qualifying child. This is the only refundable credit applied to Form 1040. Slide Seven The client makes one-of-a-kind clothing. She does not repeat any design. Due to her not repeating designs, she does not have leftover inventory. She sells her goods through Etsy, local consignment shops, and at festivals. Due to her rising popularity on social media, she believes this is the reason for her achieving her first year of profits. She attempted to keep track of

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Murchison 4 expenses via spreadsheet. However, she feels she may have missed some expenses because of how busy she had been. Slide Eight In future filings, the client should keep better track of expenses concerning their business. These could include travel expenses to festivals for purposes of business and depreciation of business equipment. It also might be a good idea to investigate making estimated tax payments, as it will lower the tax liability at the end of the year. Slide Nine Tax avoidance is the practice of lowering the tax liability of the taxpayer. This is done through deductions, credits, charitable contributions, and IRA contributions. Deductions can include medical costs, mortgage interest, state and local taxes, and certain charitable contributions. This is known as itemized deductions. Refundable credits include EIC, ACTC, American Opportunity Tax Credit, and Lifetime Learning Credit. If taking the standard deduction, the taxpayer can also deduct eligible charitable contributions. The client should also investigate the possibility of enrolling into an IRA account. Tax evasion is the intentional act of not paying taxes due. This has been done many times throughout the history of the IRS. Some examples of people being convicted of tax evasion are Willie Nelson, Wesley Snipes, and Al Capone.

Murchison 5 Slide Ten Although the results of the next tax year are unknown, it is still possible to prepare for the next time you must file. Adjusting now, such as making estimated tax payments, will make filing easier next season. Using bookkeeping programs, such as QuickBooks, helps keep track of income and expenses. These programs are not expensive and can make tracking taxes owed easier. Contributing to an IRA (up to $6,000) and making cash charitable donations can lower tax liability. Slide Eleven Keeping receipts is a good step to itemize deductions, instead of claiming the standard deduction. Things that are deductible in itemized deductions are medical expenses, mortgage interest, state and local taxes, and charitable contributions. The client should also look to deduct travel expenses and equipment depreciation as business expenses. The client should also look into contributing to an IRA, and making estimated tax payments, to lower tax liability. Slide Twelve The next section of slides will be an exposition of the applicable tax references for our client, Malik Ali. The explanation of the tax laws is in Title 26 of the United States Code (USC), titled Internal Revenue Code (IRC). Subtitle A refers to income taxes. Subtitle A, Chapter 1 explains normal taxes and surtaxes, while Subtitle A, Chapter 2 explains self-employment income taxes. The publication for the tax tables for Form 1040 will also be used to determine tax liability.

Murchison 6 Slide Thirteen The client is not married and has no dependents, therefore the filing status for this client is determined to be single. This can easily be determined by using the Interactive Tax Assistant. Slide Fourteen Some Social Security benefits are determined to be non-taxable income. If combined income is between $25,000 and $34,000, you may have to pay tax on up to fifty percent of your Social Security benefits. If it is more than $34,000, you may have to pay tax on up to eighty-five percent of your benefits. The client has three forms of taxable income: some Social Security income, IRA distributions, and business income. The client also has non-taxable income in the form of some Social Security income. This is determined by Notice 703 sent with the SSA-1099. Slide Fifteen Here, the client had the option of either taking the standard deduction or itemizing deductions. The client opted to take the standard deduction of $12,550 and had no charitable donations to be applied to taxable income. The client also filed Form 8995 to apply for the qualified business income deduction. Slide Sixteen The client had no credits applied to their tax liability.

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Murchison 7 Slide Seventeen The client has been retired for three years. Previously, the client has not had only reported retirement income, and sometimes had not had to file taxes. As the client had recently started driving for Uber, the client has been tracking mileage and income via the Uber app. The client also keeps track of Medicare premiums and Part D premiums. The client also reports other expenses. Slide Eighteen In future tax filings, the client should continue to track expenses. The client should also consider making estimated tax payments. This will lower the tax liability. The client should continue to track mileage for deductions to taxable income. The client should also consider getting commercial automobile insurance. This is a potential deduction. Slide Nineteen Tax avoidance is the practice of lowering the tax liability of the taxpayer. This is done through deductions, credits, charitable contributions, and IRA contributions. Deductions can include medical costs, mortgage interest, state and local taxes, and certain charitable contributions. This is known as itemized deductions. Refundable credits include EIC, ACTC, American Opportunity Tax Credit, and Lifetime Learning Credit. If taking the standard deduction, the taxpayer can also deduct eligible charitable contributions.

Murchison 8 Tax evasion is the intentional act of not paying taxes due. This has been done many times throughout the history of the IRS. Some examples of people being convicted of tax evasion are Willie Nelson, Wesley Snipes, and Al Capone. Slide Twenty Although the results of the next tax year are unknown, it is still possible to prepare for the next time you must file. Adjusting now, such as making estimated tax payments, will make filing easier next season. Continue using the Uber app to track mileage and income for driving. Making cash charitable donations can lower tax liability. Slide Twenty-One Keeping receipts is a good step to itemize deductions, instead of claiming the standard deduction. Things that are deductible in itemized deductions are medical expenses, mortgage interest, state and local taxes, and charitable contributions. The client should also continue tracking mileage and income through the Uber app. The client should get commercial automobile insurance, as it is deductible. The client should also consider making estimated tax payments, to lower tax liability.

Murchison 9 Works Cited Benefits Planner | Income taxes and your Social Security Benefit | SSA. (n.d.). https://www.ssa.gov/benefits/retirement/planner/taxes.html Here’s the 411 on who can deduct car expenses on their tax returns | Internal Revenue Service. (n.d.). https://www.irs.gov/newsroom/heres-the-411-on-who-can-deduct-car-expenses-on-their- tax-returns Internal revenue Code, 26 USC § 1402 Internal Revenue Code, 26 USC § 212 Internal Revenue Code, 26 USC § 213 Internal Revenue Code, 26 USC § 63 What is my filing status? | Internal Revenue Service. (n.d.). https://www.irs.gov/help/ita/what-is- my-filing-status

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