This module explains who runs the tax system and how compliance is enforced. You’ll learn what the IRS does day-to-day, what triggers audits, the rights taxpayers have, and how common penalties and amendment processes work in practice.

This module clarifies what counts as taxable income and how the tax base is constructed. You’ll define gross income, recognize common income types, compute adjusted gross income (AGI), and understand how AGI and other items feed into a taxpayer’s overall tax liability.

Learn the basics of deductions, including above-the-line deductions and below-the-line deductions. Dive into the classifications of each and which type of deduction may present the better taxpayer benefit. Explore the most-used deductions and credits that reduce taxable income and tax owed. You’ll learn when to take the standard deduction versus itemizing, common credits, and special treatments for charitable giving, education expenses, and health savings accounts.

Explore the most-used tax credits that reduce taxable income and tax owed. You’ll learn how capital assets work, including basis recovery, calculating gain or loss, and unique exceptions that create nontaxable events.

Delve into the creation and application of the passive activity rules and alternative minimum tax. Understand the historical context for the creation of these rules and their practical application today.

Many individual taxpayers also run businesses. This module introduces the IRS-recognized business structures and the tax consequences individuals face when operating as sole proprietors, partners, or LLC owners. The focus is on how income flows and is reported for personal tax returns.

Demonstrate mastery by preparing a complete, authentic federal individual tax return for a realistic taxpayer scenario. This capstone integrates income recognition, AGI adjustments, deductions and credits, business income considerations, and tax calculations to produce a finished Form 1040 and supporting schedules.