Enrolled Agent (EA®) Exam Prep 2026 Updated
Practice Questions, Comprehensive Federal Taxation
Review Detailed Explanations, Verified Answers,
Complete Success Workbook
SECTION 1: PART 1 — INDIVIDUAL TAXATION (Questions 1–40)
1. A taxpayer is unmarried, maintains a home for their dependent child, and
pays more than half the cost of maintaining the home. Which filing status is
the taxpayer eligible to use?
A) Single
B) Married Filing Separately
C) Head of Household
D) Qualifying Surviving Spouse
Rationale:
• A is incorrect: Single is for unmarried taxpayers who do not qualify for
another status.
• B is incorrect: Married Filing Separately is for married taxpayers, and this
taxpayer is unmarried.
• C is correct: A taxpayer who is unmarried, maintains a home for a
dependent child, and pays more than half the cost of maintaining the
home qualifies as Head of Household. This status provides a larger
standard deduction and more favorable tax brackets than Single.
• D is incorrect: Qualifying Surviving Spouse requires the taxpayer's spouse
to have died within the previous two years and the taxpayer to maintain a
home for a dependent child.
2. For the 2025 tax year, what is the standard deduction for a taxpayer who is
67 years old and filing as Single?
,A) The regular standard deduction only
B) The regular standard deduction plus an additional amount for being age 65 or
older
C) The regular standard deduction plus an additional amount for being age 65
or older
D) No standard deduction
Rationale:
• A is incorrect: Taxpayers age 65 or older receive an additional standard
deduction amount.
• B is correct: Taxpayers who are age 65 or older are entitled to
an additional standard deduction amount on top of the regular standard
deduction.
• C is incorrect: This is the same as B.
• D is incorrect: All taxpayers are entitled to a standard deduction unless they
itemize.
3. A single taxpayer, age 30, has interest income of $500, dividend income of
$200, and wages of $10,000. Are they required to file a federal income tax
return?
A) No, because their income is below the filing threshold
B) Yes, because they have dividend income
C) Yes, because their gross income exceeds the filing threshold for a Single
dependent
D) No, because they are not a dependent
Rationale:
• A is incorrect: The filing threshold for a Single taxpayer under age 65 is
generally around $14,600 for 2025. However, this taxpayer may be a
dependent if they can be claimed by someone else.
• B is incorrect: Dividend income alone does not trigger a filing requirement
unless total income exceeds thresholds.
, • C is correct: A Single taxpayer with gross income exceeding the filing
threshold is required to file. For a dependent, the threshold is the greater of
$1,300 or earned income plus $400. With wages of $10,000, the taxpayer
exceeds the threshold and must file.
• D is incorrect: Whether they are a dependent affects the threshold amount,
not the requirement to file.
4. Which of the following is considered "earned income" for purposes of the
earned income credit?
A) Interest income
B) Dividend income
C) Wages and self-employment income
D) Capital gains
Rationale:
• A is incorrect: Interest income is unearned income.
• B is incorrect: Dividend income is unearned income.
• C is correct: Wages, salaries, tips, and self-employment income are
considered earned income for purposes of the Earned Income Credit (EIC).
• D is incorrect: Capital gains are unearned income.
5. A taxpayer received $15,000 in alimony payments in 2025 under a divorce
decree executed in 2018. How is this alimony treated for tax purposes?
A) The payer deducts the alimony; the recipient includes it in income
B) Neither party includes or deducts the alimony
C) The payer includes the alimony in income; the recipient deducts it
D) The alimony is taxable to the recipient only if the payer itemizes
Rationale:
• A is incorrect: This treatment applies to divorce decrees executed before
2019.
, • B is correct: For divorce decrees executed after December 31, 2018,
alimony payments are not deductible by the payer and not taxable to the
recipient. The payments are simply transfers of after-tax dollars.
• C is incorrect: The payer does not include alimony in income.
• D is incorrect: The recipient does not include alimony in income.
6. A single taxpayer has the following income: Wages of $40,000, Interest
income of $500, and a capital loss of $3,000 from the sale of stock. What is the
taxpayer's adjusted gross income (AGI)?
A) $40,500
B) **$38,000**
C) $37,500
D) $43,000
Rationale:
• A is incorrect: This ignores the capital loss deduction.
• B is correct: Adjusted Gross Income (AGI) is calculated as gross income
minus "above-the-line" deductions. Capital losses are deductible up to
**$3,000 per year** against ordinary income. Wages ($40,000) + Interest
($500) - Capital Loss ($3,000) = $38,000.
• C is incorrect: This would be the result of deducting $3,000 from $40,500.
• D is incorrect: This adds the capital loss instead of subtracting it.
7. A taxpayer who is self-employed must pay which of the following taxes?
A) Income tax only
B) Self-employment tax (Social Security and Medicare)
C) Unemployment tax only
D) No taxes until they incorporate
Rationale:
• A is incorrect: Self-employed individuals pay both income tax and self-
employment tax.
Practice Questions, Comprehensive Federal Taxation
Review Detailed Explanations, Verified Answers,
Complete Success Workbook
SECTION 1: PART 1 — INDIVIDUAL TAXATION (Questions 1–40)
1. A taxpayer is unmarried, maintains a home for their dependent child, and
pays more than half the cost of maintaining the home. Which filing status is
the taxpayer eligible to use?
A) Single
B) Married Filing Separately
C) Head of Household
D) Qualifying Surviving Spouse
Rationale:
• A is incorrect: Single is for unmarried taxpayers who do not qualify for
another status.
• B is incorrect: Married Filing Separately is for married taxpayers, and this
taxpayer is unmarried.
• C is correct: A taxpayer who is unmarried, maintains a home for a
dependent child, and pays more than half the cost of maintaining the
home qualifies as Head of Household. This status provides a larger
standard deduction and more favorable tax brackets than Single.
• D is incorrect: Qualifying Surviving Spouse requires the taxpayer's spouse
to have died within the previous two years and the taxpayer to maintain a
home for a dependent child.
2. For the 2025 tax year, what is the standard deduction for a taxpayer who is
67 years old and filing as Single?
,A) The regular standard deduction only
B) The regular standard deduction plus an additional amount for being age 65 or
older
C) The regular standard deduction plus an additional amount for being age 65
or older
D) No standard deduction
Rationale:
• A is incorrect: Taxpayers age 65 or older receive an additional standard
deduction amount.
• B is correct: Taxpayers who are age 65 or older are entitled to
an additional standard deduction amount on top of the regular standard
deduction.
• C is incorrect: This is the same as B.
• D is incorrect: All taxpayers are entitled to a standard deduction unless they
itemize.
3. A single taxpayer, age 30, has interest income of $500, dividend income of
$200, and wages of $10,000. Are they required to file a federal income tax
return?
A) No, because their income is below the filing threshold
B) Yes, because they have dividend income
C) Yes, because their gross income exceeds the filing threshold for a Single
dependent
D) No, because they are not a dependent
Rationale:
• A is incorrect: The filing threshold for a Single taxpayer under age 65 is
generally around $14,600 for 2025. However, this taxpayer may be a
dependent if they can be claimed by someone else.
• B is incorrect: Dividend income alone does not trigger a filing requirement
unless total income exceeds thresholds.
, • C is correct: A Single taxpayer with gross income exceeding the filing
threshold is required to file. For a dependent, the threshold is the greater of
$1,300 or earned income plus $400. With wages of $10,000, the taxpayer
exceeds the threshold and must file.
• D is incorrect: Whether they are a dependent affects the threshold amount,
not the requirement to file.
4. Which of the following is considered "earned income" for purposes of the
earned income credit?
A) Interest income
B) Dividend income
C) Wages and self-employment income
D) Capital gains
Rationale:
• A is incorrect: Interest income is unearned income.
• B is incorrect: Dividend income is unearned income.
• C is correct: Wages, salaries, tips, and self-employment income are
considered earned income for purposes of the Earned Income Credit (EIC).
• D is incorrect: Capital gains are unearned income.
5. A taxpayer received $15,000 in alimony payments in 2025 under a divorce
decree executed in 2018. How is this alimony treated for tax purposes?
A) The payer deducts the alimony; the recipient includes it in income
B) Neither party includes or deducts the alimony
C) The payer includes the alimony in income; the recipient deducts it
D) The alimony is taxable to the recipient only if the payer itemizes
Rationale:
• A is incorrect: This treatment applies to divorce decrees executed before
2019.
, • B is correct: For divorce decrees executed after December 31, 2018,
alimony payments are not deductible by the payer and not taxable to the
recipient. The payments are simply transfers of after-tax dollars.
• C is incorrect: The payer does not include alimony in income.
• D is incorrect: The recipient does not include alimony in income.
6. A single taxpayer has the following income: Wages of $40,000, Interest
income of $500, and a capital loss of $3,000 from the sale of stock. What is the
taxpayer's adjusted gross income (AGI)?
A) $40,500
B) **$38,000**
C) $37,500
D) $43,000
Rationale:
• A is incorrect: This ignores the capital loss deduction.
• B is correct: Adjusted Gross Income (AGI) is calculated as gross income
minus "above-the-line" deductions. Capital losses are deductible up to
**$3,000 per year** against ordinary income. Wages ($40,000) + Interest
($500) - Capital Loss ($3,000) = $38,000.
• C is incorrect: This would be the result of deducting $3,000 from $40,500.
• D is incorrect: This adds the capital loss instead of subtracting it.
7. A taxpayer who is self-employed must pay which of the following taxes?
A) Income tax only
B) Self-employment tax (Social Security and Medicare)
C) Unemployment tax only
D) No taxes until they incorporate
Rationale:
• A is incorrect: Self-employed individuals pay both income tax and self-
employment tax.
