EA Exam Part 1-Individuals questions
and (VERIFIED) answers rated A+
How do calculate the deduction for self-employment health insurance? - ✔️✔️Income
-50% deduction for self-employment taxes
-any retirement contributions to SEP-IRA, SIMPLE-IRA or Keogh plan
=Allowable deduction for health insurance expenses
You cannot claim this deduction if you are reporting a loss but you can itemize the
expenses on Schedule A (limited by 7.5% AGI)
How do you calculate the amount a self-employed person is allowed to deduct for health
insurance? - ✔️✔️SE income - 50% deductions for self-employment taxes - any
retirement contributions to a SEP-IRA, SIMPLE-IRA, or Keogh plan = allowable
deduction for health insurance
For purposes of Form 8938, what are specified entities? - ✔️✔️1. a closely held
domestic corporation that has at least 50% of its gross income from passive income
2. a closely held domestic corporation if at least 50% of its assets produce passive
income
3. a closely held domestic partnership with at least 50% of its gross income from
passive income
4. a closely held domestic partnership if at least 50% of its assets produce passive
income
5. a domestic trust described in section 7701(a)(30)(E) that has one or more specified
persons as a current beneficiary
For purposes of Form 8938, what are specified individuals? - ✔️✔️1. a US citizen
2. a resident alien of the US for any part of the year
3. a nonresident alien who makes an election to be treated as a resident alien for
purposes of filing a joint return
Form 4506 - ✔️✔️Request for Copy of Transcript of Tax Form. Always familiarize
yourself with the clients prior year return.
How are short-term, long-term & dividends treated in 202? - ✔️✔️There is a difference
with all three (none are treated the same)
, How are the dollar limitations calculated for the American Opportunity Credit? -
✔️✔️On a per student basis
If reporting a loss, you cannot take the deduction but you can use this as an itemized
deduction, limited to 7.5% AGI
How do you calculate the amount of SS benefits that are taxable? - ✔️✔️Sum of AGI
+ 1/2 of SS benefit
=$32,000 or more
If your SS benefit is more than $32,000 by the calculation above, then your SS
becomes taxable
How do you calculate the amount realized on the disposition of property? - ✔️✔️Gross
selling price
-selling expenses
=amount realized
1. the gross selling price includes everything received for the property: cash, fair market
value of property or services rendered and amount of mortgage, assumed by buyer
2. selling expenses include advertising, legal fees, commissions, and any other costs
required to effect the transfer of property.
How do you determine how much estimated taxes someone needs to pay? - ✔️✔️The
lesser of the 2:
90% of the current year estimated taxes -or-
110% of last years tax liability
How do you determine if a taxpayer is married or unmarried for the tax year? - ✔️✔️It
depends on their status for the last day of the year.
How is a closer connection established to the US for tax purposes? - ✔️✔️1. The
country of residence the taxpayer designates on forms and documents
2. The types of documents and forms he or she files
3. The location of:
permanent home
family
belongings like cars, furniture, clothing
their social, political, cultural or religious affiliations
their business activities
where their drivers license is from
where they vote
charities they contribute to
and (VERIFIED) answers rated A+
How do calculate the deduction for self-employment health insurance? - ✔️✔️Income
-50% deduction for self-employment taxes
-any retirement contributions to SEP-IRA, SIMPLE-IRA or Keogh plan
=Allowable deduction for health insurance expenses
You cannot claim this deduction if you are reporting a loss but you can itemize the
expenses on Schedule A (limited by 7.5% AGI)
How do you calculate the amount a self-employed person is allowed to deduct for health
insurance? - ✔️✔️SE income - 50% deductions for self-employment taxes - any
retirement contributions to a SEP-IRA, SIMPLE-IRA, or Keogh plan = allowable
deduction for health insurance
For purposes of Form 8938, what are specified entities? - ✔️✔️1. a closely held
domestic corporation that has at least 50% of its gross income from passive income
2. a closely held domestic corporation if at least 50% of its assets produce passive
income
3. a closely held domestic partnership with at least 50% of its gross income from
passive income
4. a closely held domestic partnership if at least 50% of its assets produce passive
income
5. a domestic trust described in section 7701(a)(30)(E) that has one or more specified
persons as a current beneficiary
For purposes of Form 8938, what are specified individuals? - ✔️✔️1. a US citizen
2. a resident alien of the US for any part of the year
3. a nonresident alien who makes an election to be treated as a resident alien for
purposes of filing a joint return
Form 4506 - ✔️✔️Request for Copy of Transcript of Tax Form. Always familiarize
yourself with the clients prior year return.
How are short-term, long-term & dividends treated in 202? - ✔️✔️There is a difference
with all three (none are treated the same)
, How are the dollar limitations calculated for the American Opportunity Credit? -
✔️✔️On a per student basis
If reporting a loss, you cannot take the deduction but you can use this as an itemized
deduction, limited to 7.5% AGI
How do you calculate the amount of SS benefits that are taxable? - ✔️✔️Sum of AGI
+ 1/2 of SS benefit
=$32,000 or more
If your SS benefit is more than $32,000 by the calculation above, then your SS
becomes taxable
How do you calculate the amount realized on the disposition of property? - ✔️✔️Gross
selling price
-selling expenses
=amount realized
1. the gross selling price includes everything received for the property: cash, fair market
value of property or services rendered and amount of mortgage, assumed by buyer
2. selling expenses include advertising, legal fees, commissions, and any other costs
required to effect the transfer of property.
How do you determine how much estimated taxes someone needs to pay? - ✔️✔️The
lesser of the 2:
90% of the current year estimated taxes -or-
110% of last years tax liability
How do you determine if a taxpayer is married or unmarried for the tax year? - ✔️✔️It
depends on their status for the last day of the year.
How is a closer connection established to the US for tax purposes? - ✔️✔️1. The
country of residence the taxpayer designates on forms and documents
2. The types of documents and forms he or she files
3. The location of:
permanent home
family
belongings like cars, furniture, clothing
their social, political, cultural or religious affiliations
their business activities
where their drivers license is from
where they vote
charities they contribute to
