Enrolled Agent (EA) Special Enrollment
Examination Questions And Correct Answers
(Verified Answers) Plus Rationales
2025/2026 Q&A | Instant Download Pdf
1. Which of the following is considered taxable income?
A. Child support payments
B. Life insurance proceeds received due to the death of a relative
C. Alimony received under a divorce agreement executed before 2019
D. Welfare benefits
Rationale: Alimony received under pre-2019 agreements is taxable to the
recipient; post-2018 agreements are not.
2. A taxpayer files jointly with their spouse. The standard deduction for 2025
is:
A. $12,950
B. $18,350
C. $27,700
D. $25,900
Rationale: For 2025, the standard deduction for Married Filing Jointly is
$27,700.
3. A taxpayer sells stock held for 2 years at a gain. The gain is:
A. Ordinary income
B. Long-term capital gain
C. Short-term capital gain
D. Not taxable
Rationale: Assets held longer than 1 year are subject to long-term capital gains
rates.
,4. Which of the following deductions is subject to a 2% AGI floor?
A. Mortgage interest
B. Medical expenses
C. Unreimbursed employee business expenses
D. State and local taxes
Rationale: Miscellaneous itemized deductions like unreimbursed employee
expenses were previously subject to the 2% floor (suspended under TCJA 2018–
2025, but relevant historically for EA knowledge).
5. A taxpayer contributes $5,000 to a traditional IRA and is covered by a
retirement plan at work. The deductible amount depends on:
A. Filing status and AGI
B. AGI and participation in a retirement plan
C. Age only
D. None of the above
Rationale: Deductibility phases out based on AGI and whether the taxpayer is
covered by a workplace plan.
6. Which of the following is NOT included in gross income?
A. Wages
B. Gifts
C. Dividends
D. Interest
Rationale: Gifts are generally excluded from gross income unless they produce
income themselves.
7. For an employee, which of the following fringe benefits is taxable?
A. Health insurance
B. Cash bonuses
C. Employer-provided parking (within limits)
D. None of the above
Rationale: Cash bonuses are fully taxable; certain benefits are partially or fully
excluded.
, 8. A taxpayer has the following: $50,000 wages, $2,000 interest, $1,500 tax-
exempt municipal bond interest. Gross income is:
A. $53,500
B. $53,000
C. $52,000
D. $50,000
Rationale: Tax-exempt interest is excluded from gross income.
9. Earned income credit (EIC) is:
A. Tax on investment income
B. A refundable credit for low to moderate-income taxpayers
C. A standard deduction
D. None of the above
Rationale: EIC provides a refundable credit to eligible taxpayers based on
income and family size.
10. A child’s unearned income is subject to kiddie tax if it exceeds:
A. $1,250
B. $2,500
C. $3,000
D. $5,000
Rationale: For 2025, the threshold for unearned income subject to kiddie tax is
$2,500.
11. Which of the following is an adjustment to income?
A. State taxes
B. Student loan interest deduction
C. Mortgage interest
D. Charitable contributions
Rationale: Adjustments to income (above-the-line deductions) include student
loan interest, IRA contributions, and educator expenses.
Examination Questions And Correct Answers
(Verified Answers) Plus Rationales
2025/2026 Q&A | Instant Download Pdf
1. Which of the following is considered taxable income?
A. Child support payments
B. Life insurance proceeds received due to the death of a relative
C. Alimony received under a divorce agreement executed before 2019
D. Welfare benefits
Rationale: Alimony received under pre-2019 agreements is taxable to the
recipient; post-2018 agreements are not.
2. A taxpayer files jointly with their spouse. The standard deduction for 2025
is:
A. $12,950
B. $18,350
C. $27,700
D. $25,900
Rationale: For 2025, the standard deduction for Married Filing Jointly is
$27,700.
3. A taxpayer sells stock held for 2 years at a gain. The gain is:
A. Ordinary income
B. Long-term capital gain
C. Short-term capital gain
D. Not taxable
Rationale: Assets held longer than 1 year are subject to long-term capital gains
rates.
,4. Which of the following deductions is subject to a 2% AGI floor?
A. Mortgage interest
B. Medical expenses
C. Unreimbursed employee business expenses
D. State and local taxes
Rationale: Miscellaneous itemized deductions like unreimbursed employee
expenses were previously subject to the 2% floor (suspended under TCJA 2018–
2025, but relevant historically for EA knowledge).
5. A taxpayer contributes $5,000 to a traditional IRA and is covered by a
retirement plan at work. The deductible amount depends on:
A. Filing status and AGI
B. AGI and participation in a retirement plan
C. Age only
D. None of the above
Rationale: Deductibility phases out based on AGI and whether the taxpayer is
covered by a workplace plan.
6. Which of the following is NOT included in gross income?
A. Wages
B. Gifts
C. Dividends
D. Interest
Rationale: Gifts are generally excluded from gross income unless they produce
income themselves.
7. For an employee, which of the following fringe benefits is taxable?
A. Health insurance
B. Cash bonuses
C. Employer-provided parking (within limits)
D. None of the above
Rationale: Cash bonuses are fully taxable; certain benefits are partially or fully
excluded.
, 8. A taxpayer has the following: $50,000 wages, $2,000 interest, $1,500 tax-
exempt municipal bond interest. Gross income is:
A. $53,500
B. $53,000
C. $52,000
D. $50,000
Rationale: Tax-exempt interest is excluded from gross income.
9. Earned income credit (EIC) is:
A. Tax on investment income
B. A refundable credit for low to moderate-income taxpayers
C. A standard deduction
D. None of the above
Rationale: EIC provides a refundable credit to eligible taxpayers based on
income and family size.
10. A child’s unearned income is subject to kiddie tax if it exceeds:
A. $1,250
B. $2,500
C. $3,000
D. $5,000
Rationale: For 2025, the threshold for unearned income subject to kiddie tax is
$2,500.
11. Which of the following is an adjustment to income?
A. State taxes
B. Student loan interest deduction
C. Mortgage interest
D. Charitable contributions
Rationale: Adjustments to income (above-the-line deductions) include student
loan interest, IRA contributions, and educator expenses.
