Enrolled Agent Exam Prep - Part 2
Questions and Answers Graded A+
What is the primary responsibility of an Enrolled Agent (EA)?
✔✔a) Represent taxpayers before the IRS
b) Prepare tax returns for individuals only
c) Auditing tax returns
d) Work as an IRS employee
Which of the following income items is typically considered taxable?
✔✔a) Wages from employment
b) Child support payments
c) Gifts received
d) Inheritances
Which of these deductions is not allowed when calculating Adjusted Gross Income (AGI)?
a) Mortgage insurance premiums
b) Charitable contributions
✔✔c) Personal exemptions
1
,d) Tuition and fees
Which of the following would be considered a business expense for a sole proprietor?
✔✔a) Office supplies
b) Personal vehicle maintenance
c) Childcare costs
d) Home mortgage interest
What is the tax treatment of a traditional IRA distribution?
✔✔a) Taxable as ordinary income
b) Taxed at capital gains rates
c) Exempt from taxes
d) Only taxed if over $100,000
What is the penalty for failing to file a tax return by the due date, assuming no extension is filed?
a) 5% of the unpaid taxes per month
✔✔b) 5% of the unpaid taxes per month, up to a maximum of 25%
c) 1% of the unpaid taxes per month
2
,d) $100 per month
When is a taxpayer required to make estimated tax payments?
a) When they owe less than $1,000 in taxes
✔✔b) When they expect to owe at least $1,000 in taxes after subtracting withholding
c) Only if self-employed
d) When they have significant deductions
What is the standard deduction for a married couple filing jointly in the tax year 2023?
✔✔a) $27,700
b) $24,000
c) $19,500
d) $15,000
Which of the following is a criterion for qualifying for the Earned Income Tax Credit (EITC)?
✔✔a) Income level and number of qualifying children
b) Age requirement
c) Marital status
3
, d) Education level
Which type of tax return must an Enrolled Agent file for a client who is self-employed?
✔✔a) Schedule C (Profit or Loss from Business)
b) Form 1040 only
c) Schedule E (Rental Income)
d) Form 1120 (Corporation Tax Return)
What is the maximum amount that can be contributed to a Health Savings Account (HSA) for an
individual in 2023?
a) $2,500
✔✔b) $3,850
c) $5,000
d) $6,000
What is the taxability of Social Security benefits for most taxpayers?
✔✔a) Taxable depending on total income
b) Always taxable
4
Questions and Answers Graded A+
What is the primary responsibility of an Enrolled Agent (EA)?
✔✔a) Represent taxpayers before the IRS
b) Prepare tax returns for individuals only
c) Auditing tax returns
d) Work as an IRS employee
Which of the following income items is typically considered taxable?
✔✔a) Wages from employment
b) Child support payments
c) Gifts received
d) Inheritances
Which of these deductions is not allowed when calculating Adjusted Gross Income (AGI)?
a) Mortgage insurance premiums
b) Charitable contributions
✔✔c) Personal exemptions
1
,d) Tuition and fees
Which of the following would be considered a business expense for a sole proprietor?
✔✔a) Office supplies
b) Personal vehicle maintenance
c) Childcare costs
d) Home mortgage interest
What is the tax treatment of a traditional IRA distribution?
✔✔a) Taxable as ordinary income
b) Taxed at capital gains rates
c) Exempt from taxes
d) Only taxed if over $100,000
What is the penalty for failing to file a tax return by the due date, assuming no extension is filed?
a) 5% of the unpaid taxes per month
✔✔b) 5% of the unpaid taxes per month, up to a maximum of 25%
c) 1% of the unpaid taxes per month
2
,d) $100 per month
When is a taxpayer required to make estimated tax payments?
a) When they owe less than $1,000 in taxes
✔✔b) When they expect to owe at least $1,000 in taxes after subtracting withholding
c) Only if self-employed
d) When they have significant deductions
What is the standard deduction for a married couple filing jointly in the tax year 2023?
✔✔a) $27,700
b) $24,000
c) $19,500
d) $15,000
Which of the following is a criterion for qualifying for the Earned Income Tax Credit (EITC)?
✔✔a) Income level and number of qualifying children
b) Age requirement
c) Marital status
3
, d) Education level
Which type of tax return must an Enrolled Agent file for a client who is self-employed?
✔✔a) Schedule C (Profit or Loss from Business)
b) Form 1040 only
c) Schedule E (Rental Income)
d) Form 1120 (Corporation Tax Return)
What is the maximum amount that can be contributed to a Health Savings Account (HSA) for an
individual in 2023?
a) $2,500
✔✔b) $3,850
c) $5,000
d) $6,000
What is the taxability of Social Security benefits for most taxpayers?
✔✔a) Taxable depending on total income
b) Always taxable
4
