 Income tax 2022-2023, why and how to learn tax law. Let's do some wealth preservation with tax preparation. The first question we ask with any new topic is why? Why should I care? What's in it for me? Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Why should I learn income tax law? The first answer that pops into most people's mind is to save money. We've all heard the quote there's nothing certain in life except death and taxes death being that final sweet release from taxes. So we also want to be in compliance with the tax law. These two components comprise the fundamental thing or fundamental goal that's always in the back of our minds every time we look at anything related to income tax law and tax preparation that being how can we be in compliance with the law while paying as little taxes as legally possible that is basically the objective in the shell of a nut or a nut shell as they say. Some people might be learning tax law to start a tax business. If that is the case for you I would suggest thinking about how you might want to specialize your business objectives your business goals. For example you might specialize on low income individual income tax returns where your profit margins are usually lower but you can do more tax returns or you might be focusing in on high income tax returns where the profit margins are usually larger but you do less tax returns because they are more complex. You might be focusing in instead of on individual tax preparation on business tax preparation where you might focus on industry or type of entity or both for example industry being something like real estate construction and so on the type of entity being legal proprietorship versus LLC versus a partnership versus an S corporation versus a C corporation. Oftentimes those two things are linked because for legal purposes many types of industries will structure their type of entity in the same format so you can start to specialize in those ways as well. Other questions less directly related to our current tax bill which learning income tax law can help us to understand and answer include how should we judge our government? What is the purpose of government? What should government do? These are questions that we may and I would argue have an obligation to understand as citizens and acting citizens of a democratic republic and you might be saying hey look those kind of questions the tax code is just like a small component of those kinds of questions but I would argue that you can do far worse in understanding a civilization than to understand the tax code. In other words whether you're talking about our current civilization other civilizations within our current time or those in the past understanding the tax code can tell you a whole lot about the values of that civilization so when we're applying it to ourselves where we are at at this place in time questions such as how big should our government be? Should it be growing or should we be retracting the government? And what's going to be the difference or how can we delineate the powers possibly between a federal government and the state and local governments? What should the government be spending the money on? What kinds of things are better served better done by the government? What kind of things are better served and better done by the market? So these are types of questions that of course the tax code is very intimately related to. You also have questions such as justice and what is fair because when we talk about the tax code we're talking in part about the distribution of economic resources. What kind of economic system do we have here? Do we have a market based economic system or a redistributory based economic system? When you have these kind of arguments often times politicians will use very vague language such as we want a tax code that is fair, we want a tax code that is just. When you hear politicians saying that it's often because they're being quite misleading with those terms because the words fair and just are doing all the work. There is nobody that will argue to have an unjust tax system. No one's going to disagree with a just tax system or a fair tax system. People will disagree and have arguments on legitimate debate about what the term just and fair means when applied to tax law. And so those are some ideas or things that we might want to keep in mind when we're thinking about tax preparation because it makes things a little bit more interesting and again helps us to do kind of our civic duty type of stuff as well. How to learn tax law. I would argue you want to question that reason with it debate it like you would with a good book in part because that helps you to better fully understand it internalize it put it into the long term memory so that you can recall it in the future. It also allows you to understand things more conceptually so that you can apply the same concept in a different scenario and be more flexible so that when the law inevitably changes in the future you can more easily flex and change with it in the future. Your only other option is try to just memorize the law which is kind of similar to just trying to memorize a list with no context or memorize a phone number. That's quite difficult to do. How do you create context? How do you create a better memory? You ask questions. You create a story and there is a story in the tax code which is actually quite interesting if you kind of dig into it which is you can ask questions why did they make this law? When did they make the law? What are they trying to incentivize when they put this law into place? Do I agree with the incentives that they put in place on this law? Why or why not? Now as you're asking those kinds of questions when learning the tax law you might be saying hey look what's the point of this because I don't have any direct connection to create these laws or to change these laws other than as a participant in the Democratic Republic which I still say is important in and of itself and the fact that I know like the rationale for the law doesn't help me to actually do the preparation from just a data input standpoint but I would argue it does help you from a data input standpoint because it helps you to memorize through the story it'll help you to memorize what is happening with the law if you just try to learn from straight rogue recall repetition with no story then it's quite difficult to do. Obviously when you talk to a client they might not care much about the history of the law or why it's in place they just want their tax return prepared and whatnot and that's fine but sometimes you have some clients where they want to know that kind of stuff and then you have some talking points which can be kind of interesting as well as you go through kind of the interview process but mainly you do that you create the story because you want to better recall the information and it can be an interesting thing to do and again makes you a lot more flexible because the law will inevitably change in the future if it's just something that you're trying to rogue memorize and you have no connection to it you have no story behind it then it's going to be more of a frustrating experience.