Basics of Federal Income Taxation

Basics of Federal Income Taxation


Welcome to LawShelf’s video-course on the basics of federal income taxation. This course provides an overview of how income is calculated and taxed on the federal level and helps prepare students for more advanced courses in taxation.

This is an introductory level course and no prior knowledge or experience in law or taxation is required.


The first two modules focus on defining gross income. While the Internal Revenue Code describes income as being taxable from “whatever source derived,” it also devotes scores of statutes and regulations to illustrating what constitutes income. In Module 1, we’ll look at wages and business income, which employee fringe benefits are counted as income, capital gains, dividends, rents, royalties and others. Module 2 turns to income derived from annuities, pensions, social security, retirement account distributions and other sources. We’ll also survey the types of income specifically exempted by the Code as non-taxable.


Modules 3 and 4 turn to income tax deductions. In Module 3, we’ll look at personal deductions, which includes a discussion of the standard deduction and itemized deductions on Schedule A. We’ll also look at deductions and limits thereon for interest paid, state and local taxes, casualty losses and charitable contributions. In Module 4, we’ll look at deductions more relevant to businesses and business activities. These include costs of doing business, depreciation and amortization and other corporate and business deductions. We’ll also focus on the qualified business income deduction, a boon for small businesses under the Tax Cuts and Jobs Act of 2017.


In our final module, we’ll look at tax credits, which allow dollar-for-dollar setoffs of federal income tax. We’ll look at tax credits related to children and dependents, education credits, various other credits and the important “earned income tax credit,” which provides substantial tax benefits for low-income taxpayers. Finally, we’ll look at the alternative minimum tax (AMT), which ensures that high-income taxpayers pay at least a minimum level of income taxes in spite of their possible deductions.


When you complete this course, you will understand how federal income tax is assessed, what constitutes income and have a firm grasp of the most important federal income tax deductions and credits.


Best of luck and we welcome your feedback.

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You retain access the modules and take the final exam as long as you are a subscriber to LawShelf.

Gross Income, Part 1 - Module 1 of 5

Gross Income, Part 2, Module 2 of 2

Personal Deductions - Module 3 of 5

Business Deductions - Module 4 of 5

Tax Credits and the Alternative Minimum Tax - Module 5 of 5

Final Exam only needs to be taken by those seeking to earn the Digital Badge credentials for this course.