Tax Preparer Final Exam | 2025
Latest Edition
Real Exam-Based Questions and Verified Answers | 100%
Accuracy | Tax Professional Certification | Graded A+
Introduction
This resource includes 140 verified multiple-choice questions and correct answers from
the latest Tax Preparer Final Exam, updated for the 2025 testing cycle. It covers essential
areas such as individual and business tax filing, deductions, credits, IRS compliance, and
ethical practices—ideal for preparing tax professionals for real-world certification success.
Answer Format
All correct answers are clearly marked in bold and green to enhance review efficiency and
support confident exam preparation.
Questions
1. Which form is used to report nonemployee compensation of $600 or
more paid to an independent contractor?
a) Form W-2
b) Form 1099-NEC
c) Form 1099-MISC
d) Form 1040
b) Form 1099-NEC
Rationale: Form 1099-NEC is used to report nonemployee compensation of $600 or more
paid to an independent contractor.
2. What is the standard deduction for a single filer in 2025?
a) $14,600
b) $13,850
c) $15,000
d) $12,950
a) $14,600
Rationale: The IRS sets the standard deduction for single filers at $14,600 for the 2025 tax
year.
3. A taxpayer with a dependent child under 17 qualifies for which tax
credit?
a) Earned Income Credit
,b) Child Tax Credit
c) American Opportunity Credit
d) Lifetime Learning Credit
b) Child Tax Credit
Rationale: The Child Tax Credit applies to taxpayers with dependent children under 17.
4. What is the penalty for failing to file a tax return by the due date
without an extension?
a) 0.5% per month
b) 5% per month
c) 2% per month
d) 1% per month
b) 5% per month
Rationale: The IRS imposes a 5% per month penalty for failure to file, up to a maximum of
25%.
5. Which professionals have unlimited representation rights before the
IRS?
a) Registered Tax Return Preparers
b) Enrolled Agents, CPAs, and attorneys
c) Non-credentialed tax preparers
d) Tax preparers with PTIN only
b) Enrolled Agents, CPAs, and attorneys
Rationale: Enrolled Agents, CPAs, and attorneys have unlimited representation rights before
the IRS.
6. A taxpayer paid $8,000 in qualified tuition but received a $3,000
scholarship. How much can they claim for the American Opportunity
Credit?
a) $8,000
b) $5,000
c) $2,500
d) $4,000
b) $5,000
Rationale: The American Opportunity Credit allows a maximum of $4,000 in qualified
expenses after scholarships, so $8,000 - $3,000 = $5,000.
7. What is the minimum age requirement to become an Enrolled Agent?
a) 18
b) 21
c) 25
d) 16
a) 18
Rationale: The IRS requires Enrolled Agents to be at least 18 years old.
, 8. How often must Enrolled Agents complete continuing education?
a) Every year
b) Every two years
c) Every three years
d) Every five years
c) Every three years
Rationale: Enrolled Agents must complete 72 hours of continuing education every three
years.
9. Which form is used to claim the Premium Tax Credit for health
insurance?
a) Form 8962
b) Form 1040
c) Form 1095-A
d) Form 8863
a) Form 8962
Rationale: Form 8962 is used to reconcile and claim the Premium Tax Credit.
10. What is the due diligence requirement for tax professionals?
a) Filing returns without client input
b) Ensuring accurate and complete returns through reasonable inquiries
c) Guaranteeing client refunds
d) Providing legal advice
b) Ensuring accurate and complete returns through reasonable inquiries
Rationale: Tax professionals must make reasonable inquiries to ensure accurate and complete
returns.
11. A married couple filing jointly has an AGI of $120,000. What is their
standard deduction for 2025?
a) $29,200
b) $27,700
c) $14,600
d) $20,800
a) $29,200
Rationale: The standard deduction for married filing jointly in 2025 is $29,200.
12. Which schedule is used to report business income or loss for a sole
proprietor?
a) Schedule A
b) Schedule C
c) Schedule D
d) Schedule E
b) Schedule C
Rationale: Schedule C is used to report business income or loss for sole proprietors.
Latest Edition
Real Exam-Based Questions and Verified Answers | 100%
Accuracy | Tax Professional Certification | Graded A+
Introduction
This resource includes 140 verified multiple-choice questions and correct answers from
the latest Tax Preparer Final Exam, updated for the 2025 testing cycle. It covers essential
areas such as individual and business tax filing, deductions, credits, IRS compliance, and
ethical practices—ideal for preparing tax professionals for real-world certification success.
Answer Format
All correct answers are clearly marked in bold and green to enhance review efficiency and
support confident exam preparation.
Questions
1. Which form is used to report nonemployee compensation of $600 or
more paid to an independent contractor?
a) Form W-2
b) Form 1099-NEC
c) Form 1099-MISC
d) Form 1040
b) Form 1099-NEC
Rationale: Form 1099-NEC is used to report nonemployee compensation of $600 or more
paid to an independent contractor.
2. What is the standard deduction for a single filer in 2025?
a) $14,600
b) $13,850
c) $15,000
d) $12,950
a) $14,600
Rationale: The IRS sets the standard deduction for single filers at $14,600 for the 2025 tax
year.
3. A taxpayer with a dependent child under 17 qualifies for which tax
credit?
a) Earned Income Credit
,b) Child Tax Credit
c) American Opportunity Credit
d) Lifetime Learning Credit
b) Child Tax Credit
Rationale: The Child Tax Credit applies to taxpayers with dependent children under 17.
4. What is the penalty for failing to file a tax return by the due date
without an extension?
a) 0.5% per month
b) 5% per month
c) 2% per month
d) 1% per month
b) 5% per month
Rationale: The IRS imposes a 5% per month penalty for failure to file, up to a maximum of
25%.
5. Which professionals have unlimited representation rights before the
IRS?
a) Registered Tax Return Preparers
b) Enrolled Agents, CPAs, and attorneys
c) Non-credentialed tax preparers
d) Tax preparers with PTIN only
b) Enrolled Agents, CPAs, and attorneys
Rationale: Enrolled Agents, CPAs, and attorneys have unlimited representation rights before
the IRS.
6. A taxpayer paid $8,000 in qualified tuition but received a $3,000
scholarship. How much can they claim for the American Opportunity
Credit?
a) $8,000
b) $5,000
c) $2,500
d) $4,000
b) $5,000
Rationale: The American Opportunity Credit allows a maximum of $4,000 in qualified
expenses after scholarships, so $8,000 - $3,000 = $5,000.
7. What is the minimum age requirement to become an Enrolled Agent?
a) 18
b) 21
c) 25
d) 16
a) 18
Rationale: The IRS requires Enrolled Agents to be at least 18 years old.
, 8. How often must Enrolled Agents complete continuing education?
a) Every year
b) Every two years
c) Every three years
d) Every five years
c) Every three years
Rationale: Enrolled Agents must complete 72 hours of continuing education every three
years.
9. Which form is used to claim the Premium Tax Credit for health
insurance?
a) Form 8962
b) Form 1040
c) Form 1095-A
d) Form 8863
a) Form 8962
Rationale: Form 8962 is used to reconcile and claim the Premium Tax Credit.
10. What is the due diligence requirement for tax professionals?
a) Filing returns without client input
b) Ensuring accurate and complete returns through reasonable inquiries
c) Guaranteeing client refunds
d) Providing legal advice
b) Ensuring accurate and complete returns through reasonable inquiries
Rationale: Tax professionals must make reasonable inquiries to ensure accurate and complete
returns.
11. A married couple filing jointly has an AGI of $120,000. What is their
standard deduction for 2025?
a) $29,200
b) $27,700
c) $14,600
d) $20,800
a) $29,200
Rationale: The standard deduction for married filing jointly in 2025 is $29,200.
12. Which schedule is used to report business income or loss for a sole
proprietor?
a) Schedule A
b) Schedule C
c) Schedule D
d) Schedule E
b) Schedule C
Rationale: Schedule C is used to report business income or loss for sole proprietors.
