Enrolled Agent Exam Part 1 2024 Questions with Correct Answers
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Course
EA - Enrolled Agent
Institution
EA - Enrolled Agent
tax filing flow - Answer-filing requirement and status -income - income exclusion - adjust to income AGI (schedule1) - deduction - taxable income and taxation - additional tax (schedule2) - credits (schedule3) - payment (withholding) or refund
qualifying relative - Answer-1. living together all ...
Enrolled Agent Exam Part 1 2024
Questions with Correct Answers
tax filing flow - Answer-filing requirement and status -income - income exclusion - adjust
to income AGI (schedule1) - deduction - taxable income and taxation - additional tax
(schedule2) - credits (schedule3) - payment (withholding) or refund
qualifying relative - Answer-1. living together all year OR a family member (no foster
parents, no cousins)
2. cannot be a qualifying child
3. not provide over half of own support
4. person's GI less than 4300
qualifying child - Answer-1. younger than 19 or 24 if full-time student OR any age if
disabled
2. live more than half a year
3. not provide over half of own support
multiple support agreement (form 2120) - Answer-1. claiming person more than 10%, no
one more than half
2. each one pays over 10% sign statement
Married Filing Separately (MFS) - Answer-1. NO-child and dependent care expenses
credit (1/2 income exclusion limit through ER asst. program); EIC; adoption credit or
exclusion; education credit or loan interest deduction; exclusion on saving bonds
interest
2. 1/2-CTC and saver's credit, capital loss deduction (1500), standard deduction
3. one spouse itemize, the other one cannot standard
Qualifying Widow(er) (QW) - Answer-1. file jointly in the year of death, then two years
QW after
2. must have a child as dependent (same standard as qualifying child)
3. if remarry, descendant file MFS, survivor lose QW
due diligence - Answer-1. complete form8867 if filing HOH, EIC, CTC, ACTC, AOTC,
ODC
2. keep records for 3 years
3. each failure worth $545 penalty
custodial vs. noncustodial parent (form 8332) - Answer--custodial: more nights, claim
HOH, care expenses credit, care benefits exclusion, EIC, health coverage credit
-noncustodial: CTC, ACTC, credit for other dependents
,Head of Household (HOH) - Answer-1. custodial parent, live together (expect parents)
more than half year
2. qualifying child or qualifying family member
3. more than half cost of living
4. unmarried (no spouse last 6 months)
dependent filing requirements - Answer-1. unearned income 1100+
2. earned income 12550+
3. gross income > 1100 or earned income+350
4. if 65+ add 1700, if blind, add another 1700
earned income - Answer-1. union strike benefits, long term disability benefits, etc,
2. scholarship or fellowship grant
3. IRA contributions, alimony before 2019
cash method vs accrual method - Answer-1. cash: when you actually spend or receive
the money (advance commisions)
2. accrual: when things happen + amount pay in advance but determinable (rent)
3. most people use cash method
TIN - Answer-SSN only: EIC, CTC, ACTC
ITIN: cannot efile first year, expire after three years of no use
ATIN: cannot use after adoption final
tip income - Answer-1. report if 20+ on the 10th of next month
2. non cash tips to IRS only
3. unreported penalty 50% unpaid SS and Med tax
4. tip tax are not reported to ER, only to IRS
group term life insurance - Answer-1. employer pays 50k below not income
2. premium above 50k coverage include in income
disability and sick pay - Answer-if employer pay premium: taxable
foreign employer working in US - Answer-1. exempt from SS and Med tax
, 2. SE tax on service performed in the US
church (clergy) - Answer-1. they are still traditional employee even though they pay SE
tax
2. federal income includes: salary - actual utility cost (if any) housing allowance
3. SE income: salary (include utility) + FMV housing
original issue discount (OID) - Answer-1. OID=price at maturity - issue price (portion is
taxable)
2. do not apply to tax exempt, saving bonds or 1 year and less maturity date
3. no need to report if discount < 0.25% * sale price * years holding
ordinary vs qualified dividends - Answer-1. ordinary dividends, ordinary income
2. qualified dividends: 20% for >37%; 15% for 15-37%; 0% for <15%
when does distribution in stocks are taxable? - Answer-1. choose to receive stock or
cash
2. some people get cash other than stock
3. preferred stock leading to change of ownership
non-dividend distribution - Answer-if the distribution is not earnings, then it reduces the
basis to zero, then start taxable
reinvested dividends - Answer-they are income even though not cash
retirement distributions - Answer-1. surviving spouse could rollover to own account and
beneficiary must withdraw in certain time
2. employer stock: tax at capital gain rate until net unrealized appreciation; tax
depending on holding period after NUA
annuity - Answer-1. contribution not deductible but tax free until withdrawn
2. withdraw before annuitization tax earnings first, then return of capital
3. allocate each payment to income and basis after annuitization ratio
rollover - Answer-qualified plan to traditional IRA within 60 days
can NOT rollover to Roth IRA (no basis)
SS provisional income - Answer-1. 1/2 social security + all other income (including tax
exempt interest)
2. MFS and live with spouse = tax at 85%
3. 0, 50% (25000, 34000), 85% (32000, 44000)
rental real estate - Answer-1. passive activity and loss can only offset gain
2. actively participate and MAGI below 100k: 25000 loss offset ordinary income
3. professional: 750 hour of material participation may deduct lose against ordinary
income
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