Competencies

In this project, you will demonstrate your mastery of the following competencies:

Evaluate tax laws, regulations, and codes for diverse financial situations

Prepare complex income tax returns that adhere to tax laws, regulations, and codes

Advise clients on tax positions to achieve desired outcomes

Scenario

You are a tax preparer and have been asked to complete the previous year$$s tax return for new client Gabriel and Sophie Dubois. Because the Dubois children, Jean and Juliette, are now in college or soon to enter college, Gabriel and Sophie decided to pursue opportunities that resulted in additional streams of income. Gabriel is employed as an appraiser, and Sophie is an ophthalmologist at the local clinic. The Dubois couple provided the tax documents and additional information you requested for their tax return during their interview. In this interview, Sophie mentioned that she hates owing money with her tax return and wants to know how to avoid that scenario. To properly prepare the complex income tax return and advise your client, you will need to apply the appropriate tax laws, regulations, and codes.

Directions

Complete an individual federal tax return for the current year and construct a memo for sharing results and recommendations with the client. Refer to the Supporting Materials and module resources for access to the correct tax return forms. Use any necessary documents from Milestone One and Milestone Two for this project. Remember to address and incorporate any feedback you may have received from your instructor on your milestone assignments.

Specifically, you must address the following rubric criteria:

Part One: Tax Code and Planning: Use the client$$s tax profile and provided documents to identify the appropriate tax forms that are needed to complete the tax return. These criteria will be assessed through the completion of the tax form.

Connect the client$$s information to the appropriate tax forms needed to complete the tax return.

Apply the relevant information from the provided taxpayer source documentation to the tax forms.

Assess the character of all income sources.

Evaluate whether the taxpayer$$s deductions should be itemized or not based on ethical standards for determining and communicating deductions.

Distinguish between the expenses connected with the client$$s employment that are eligible for deduction and those that are not.

Part Two: Prepare a Complex Tax Return: Complete a tax return that adheres to tax laws, regulations, and codes.

Evaluate which items meet the criteria for being included in gross income.

Categorize deductions as either being from adjusted gross income or for adjusted gross income, including any variances or inaccuracies in these deductions.

Calculate the individual taxable income using the tax formula.

Determine whether the client has overpaid or underpaid their taxes. Include the following in your response:

The client$$s calculated tax liability

The client$$s subtracted tax withholdings for the current tax year

Explain the tax laws, regulations, and codes that were used to determine the proper tax reporting.

Part Three: Tax Position Advising: Summarize the results of the tax return in a memo and provide advice to the client explaining how they can avoid having a balance due for future tax returns.

Summarize the tax issue and possible solutions using concise language and ethical standards for tax preparers.

Determine the client$$s potential positions for future tax returns using tax law to support your reasoning.

Recommend the best and most practical solution for the client based on their goal for future tax returns using concise language.

Justify whether the client is eligible for VITA or TCE.

Justify your recommendation to the client using applicable tax laws, regulations, and codes.

What to Submit

To complete this project, you must submit the following:

Completed Tax Return With Correct Tax Forms

Your submission should include the correct tax forms that are applicable to your client$$s situation and a completed tax return.

Client Memo

Your submission should include a $1-$ to $2-$page Word document with $12-$point Times New Roman font, double spacing, and one$-$inch margins. Sources should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations.