SENIOR TAX SPECIALIST (2025 TAX LAW) ACTUAL] QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A |LATEST EXAM UPDATE 2026/2027
Under the 2025 tax changes, what is the temporary SALT deduction cap?
A. $10,000
B. $25,000
C. $40,000
D. $50,000
🟢 C. $40,000
🔴 RATIONALE: The One Big Beautiful Bill (OBBB) temporarily increased the State and Local Tax (SALT) deduction cap to $40,000
through 2029.
Which of the following is true regarding the 2026 charitable deduction for non-itemizers?
A. It is limited to $300 per taxpayer
B. It is limited to $1,000 for single filers and $2,000 for married couples
C. It has been abolished
D. It is only available for high-net-worth individuals
🟢 B. It is limited to $1,000 for single filers and $2,000 for married couples
🔴 RATIONALE: Starting in 2026, a permanent charitable deduction for non-itemizers returns, capped at $1,000 for single filers and
$2,000 for married couples.
The additional $6,000 tax deduction for seniors aged 65 and older is available for which years?
A. 2024–2026
B. 2025–2028
C. 2025–2030
D. 2026–2029
🟢 B. 2025–2028
🔴 RATIONALE: The new $6,000 deduction for taxpayers 65 and older is effective for the 2025 through 2028 tax years.
Regarding the taxation of "qualified tips" under 2026 rules, which requirement must be met?
A. Tips must be mandatory service charges
B. Tips must be voluntary and paid in cash or by charge card
C. Tips must be aggregated with regular wages on Form W-2
D. Tips must be earned by employees in non-traditional occupations
🟢 B. Tips must be voluntary and paid in cash or by charge card
,🔴 RATIONALE: Qualified tips must be voluntary and paid in cash or by charge card to an individual in an occupation that traditionally
receives tips.
What is the status of 100% bonus depreciation for 2025/2026?
A. It is repealed
B. It is capped at 50%
C. It is reinstated at 100%
D. It is only available for real estate
🟢 C. It is reinstated at 100%
🔴 RATIONALE: The OBBB reinstated 100% bonus depreciation for qualified business property for the 2025 and 2026 tax years.
What is the lifetime estate tax exemption amount for 2025?
A. $10 million
B. $13.99 million
C. $15 million
D. $12.06 million
🟢 B. $13.99 million
🔴 RATIONALE: The lifetime gift and estate tax exclusion for 2025 is set at $13.99 million.
Which of the following describes the change to Section 163(j) interest expense limitation in 2026?
A. It is limited to 20% of EBIT
B. It is limited to 30% of EBITDA
C. It is removed entirely
D. It is limited to 50% of net income
🟢 B. It is limited to 30% of EBITDA
🔴 RATIONALE: Under the new tax environment, the business interest expense limitation is generally calculated using 30% of
EBITDA.
When must an employer report qualified tips and overtime compensation separately?
A. On a quarterly business tax return
B. On a monthly withholding statement
C. On a Form W-2 or 1099-NEC
D. Only upon request by the IRS
🟢 C. On a Form W-2 or 1099-NEC
🔴 RATIONALE: Employers are required to separately report qualified tips and overtime compensation on Form W-2 or 1099-NEC
starting in 2026.
, What is the 2026 standard deduction for a married couple filing jointly?
A. $31,500
B. $32,200
C. $30,000
D. $35,000
🟢 B. $32,200
🔴 RATIONALE: The 2026 inflation-adjusted standard deduction for married filing jointly is $32,200.
The FDII regime is known as what beginning in 2026?
A. FDDEI
B. NCTI
C. FIRPTA
D. CAMT
🟢 A. FDDEI
🔴 RATIONALE: Starting in 2026, Foreign-Derived Intangible Income (FDII) is referred to as Foreign-Derived Deduction-Eligible
Income (FDDEI).
Under the new rules for 2026, the GILTI regime is known as:
A. Foreign tax credit
B. Net CFC tested income (NCTI)
C. Controlled foreign corporation tax
D. Global intangible low-taxed income
🟢 B. Net CFC tested income (NCTI)
🔴 RATIONALE: The GILTI regime has been transitioned to the Net CFC tested income (NCTI) classification for 2026.
Which tax strategy should high-earning taxpayers consider regarding charitable donations?
A. Postpone all donations to 2027
B. Maximize donations in 2026 to avoid the 0.5% AGI floor
C. Accelerate planned 2026 donations into 2025
D. Only donate through private foundations
🟢 C. Accelerate planned 2026 donations into 2025
🔴 RATIONALE: High earners may benefit from donating in 2025 to avoid the 0.5% AGI floor and potential 35% bracket limitation
introduced for 2026.
What is the "continuity requirement" for renewable energy incentives?
A. Demonstrating continuous progress toward project completion
RATIONALES 2026 Q&A |LATEST EXAM UPDATE 2026/2027
Under the 2025 tax changes, what is the temporary SALT deduction cap?
A. $10,000
B. $25,000
C. $40,000
D. $50,000
🟢 C. $40,000
🔴 RATIONALE: The One Big Beautiful Bill (OBBB) temporarily increased the State and Local Tax (SALT) deduction cap to $40,000
through 2029.
Which of the following is true regarding the 2026 charitable deduction for non-itemizers?
A. It is limited to $300 per taxpayer
B. It is limited to $1,000 for single filers and $2,000 for married couples
C. It has been abolished
D. It is only available for high-net-worth individuals
🟢 B. It is limited to $1,000 for single filers and $2,000 for married couples
🔴 RATIONALE: Starting in 2026, a permanent charitable deduction for non-itemizers returns, capped at $1,000 for single filers and
$2,000 for married couples.
The additional $6,000 tax deduction for seniors aged 65 and older is available for which years?
A. 2024–2026
B. 2025–2028
C. 2025–2030
D. 2026–2029
🟢 B. 2025–2028
🔴 RATIONALE: The new $6,000 deduction for taxpayers 65 and older is effective for the 2025 through 2028 tax years.
Regarding the taxation of "qualified tips" under 2026 rules, which requirement must be met?
A. Tips must be mandatory service charges
B. Tips must be voluntary and paid in cash or by charge card
C. Tips must be aggregated with regular wages on Form W-2
D. Tips must be earned by employees in non-traditional occupations
🟢 B. Tips must be voluntary and paid in cash or by charge card
,🔴 RATIONALE: Qualified tips must be voluntary and paid in cash or by charge card to an individual in an occupation that traditionally
receives tips.
What is the status of 100% bonus depreciation for 2025/2026?
A. It is repealed
B. It is capped at 50%
C. It is reinstated at 100%
D. It is only available for real estate
🟢 C. It is reinstated at 100%
🔴 RATIONALE: The OBBB reinstated 100% bonus depreciation for qualified business property for the 2025 and 2026 tax years.
What is the lifetime estate tax exemption amount for 2025?
A. $10 million
B. $13.99 million
C. $15 million
D. $12.06 million
🟢 B. $13.99 million
🔴 RATIONALE: The lifetime gift and estate tax exclusion for 2025 is set at $13.99 million.
Which of the following describes the change to Section 163(j) interest expense limitation in 2026?
A. It is limited to 20% of EBIT
B. It is limited to 30% of EBITDA
C. It is removed entirely
D. It is limited to 50% of net income
🟢 B. It is limited to 30% of EBITDA
🔴 RATIONALE: Under the new tax environment, the business interest expense limitation is generally calculated using 30% of
EBITDA.
When must an employer report qualified tips and overtime compensation separately?
A. On a quarterly business tax return
B. On a monthly withholding statement
C. On a Form W-2 or 1099-NEC
D. Only upon request by the IRS
🟢 C. On a Form W-2 or 1099-NEC
🔴 RATIONALE: Employers are required to separately report qualified tips and overtime compensation on Form W-2 or 1099-NEC
starting in 2026.
, What is the 2026 standard deduction for a married couple filing jointly?
A. $31,500
B. $32,200
C. $30,000
D. $35,000
🟢 B. $32,200
🔴 RATIONALE: The 2026 inflation-adjusted standard deduction for married filing jointly is $32,200.
The FDII regime is known as what beginning in 2026?
A. FDDEI
B. NCTI
C. FIRPTA
D. CAMT
🟢 A. FDDEI
🔴 RATIONALE: Starting in 2026, Foreign-Derived Intangible Income (FDII) is referred to as Foreign-Derived Deduction-Eligible
Income (FDDEI).
Under the new rules for 2026, the GILTI regime is known as:
A. Foreign tax credit
B. Net CFC tested income (NCTI)
C. Controlled foreign corporation tax
D. Global intangible low-taxed income
🟢 B. Net CFC tested income (NCTI)
🔴 RATIONALE: The GILTI regime has been transitioned to the Net CFC tested income (NCTI) classification for 2026.
Which tax strategy should high-earning taxpayers consider regarding charitable donations?
A. Postpone all donations to 2027
B. Maximize donations in 2026 to avoid the 0.5% AGI floor
C. Accelerate planned 2026 donations into 2025
D. Only donate through private foundations
🟢 C. Accelerate planned 2026 donations into 2025
🔴 RATIONALE: High earners may benefit from donating in 2025 to avoid the 0.5% AGI floor and potential 35% bracket limitation
introduced for 2026.
What is the "continuity requirement" for renewable energy incentives?
A. Demonstrating continuous progress toward project completion
