EA Exam Part 1 – Interactive Practice Questions
Select an answer. If correct, the explanation will appear.
Question 1: Which filing status generally provides the highest standard deduction for an unmarried taxpayer?
Correct!
Head of Household generally offers a higher standard deduction and more favorable brackets for eligible unmarried taxpayers maintaining a home for a qualifying person.
Head of Household generally offers a higher standard deduction and more favorable brackets for eligible unmarried taxpayers maintaining a home for a qualifying person.
Question 2: What IRS form is commonly used to report wages paid to employees?
Correct!
Form W‑2 reports wages, tips, and other compensation paid to employees.
Form W‑2 reports wages, tips, and other compensation paid to employees.
Question 3: What is the normal due date for most individual income tax returns (Form 1040)?
Correct!
Most individual tax returns are due April 15 unless it falls on a weekend or holiday.
Most individual tax returns are due April 15 unless it falls on a weekend or holiday.
Question 4: Which of the following income types is generally taxable?
Correct!
Lottery winnings are taxable income and must be reported on the tax return.
Lottery winnings are taxable income and must be reported on the tax return.
Question 5: What is the purpose of Form W‑4?
Correct!
Employees use Form W‑4 to tell employers how much tax to withhold from wages.
Employees use Form W‑4 to tell employers how much tax to withhold from wages.
Question 6: Which credit helps offset expenses paid for care of a dependent while working?
Correct!
The Child and Dependent Care Credit offsets costs of caring for a qualifying person so the taxpayer can work.
The Child and Dependent Care Credit offsets costs of caring for a qualifying person so the taxpayer can work.
Question 7: What type of income is reported on Schedule C?
Correct!
Schedule C reports income or loss from a sole proprietorship or self‑employed activity.
Schedule C reports income or loss from a sole proprietorship or self‑employed activity.
Question 8: Which of the following is refundable?
Correct!
The Earned Income Credit is refundable and can generate a refund even if no tax is owed.
The Earned Income Credit is refundable and can generate a refund even if no tax is owed.
Question 9: What schedule is used for itemized deductions?
Correct!
Schedule A is used to claim itemized deductions instead of the standard deduction.
Schedule A is used to claim itemized deductions instead of the standard deduction.
Question 10: Which credit helps with qualified higher education expenses?
Correct!
The American Opportunity Credit provides tax relief for qualified tuition and education expenses.
The American Opportunity Credit provides tax relief for qualified tuition and education expenses.
Question 11: What does Form 1099‑NEC report?
Correct!
Form 1099‑NEC reports payments made to independent contractors.
Form 1099‑NEC reports payments made to independent contractors.
Question 12: Which deduction is an adjustment to income?
Correct!
Student loan interest is an above‑the‑line deduction reducing adjusted gross income.
Student loan interest is an above‑the‑line deduction reducing adjusted gross income.
Question 13: Which form requests an automatic extension for Form 1040?
Correct!
Form 4868 grants an automatic extension to file the individual tax return.
Form 4868 grants an automatic extension to file the individual tax return.
Question 14: Which income type appears on Schedule B?
Correct!
Schedule B reports taxable interest and ordinary dividends.
Schedule B reports taxable interest and ordinary dividends.
Question 15: Which tax covers Social Security and Medicare for self‑employed individuals?
Correct!
Self‑employment tax covers Social Security and Medicare contributions.
Self‑employment tax covers Social Security and Medicare contributions.
Question 16: Which filing status may a surviving spouse use for two years after death of spouse?
Correct!
Qualifying Widow(er) status allows use of joint tax rates for two years after a spouse's death if requirements are met.
Qualifying Widow(er) status allows use of joint tax rates for two years after a spouse's death if requirements are met.
Question 17: Mortgage interest is generally what type of deduction?
Correct!
Mortgage interest is usually claimed as an itemized deduction on Schedule A.
Mortgage interest is usually claimed as an itemized deduction on Schedule A.
Question 18: Which credit benefits low‑income workers and families?
Correct!
The Earned Income Credit reduces taxes and may provide refunds to low‑income workers.
The Earned Income Credit reduces taxes and may provide refunds to low‑income workers.
Question 19: Which form amends a previously filed tax return?
Correct!
Form 1040‑X is used to correct errors on a previously filed individual tax return.
Form 1040‑X is used to correct errors on a previously filed individual tax return.
Question 20: Which document reports interest income from a bank?
Correct!
Form 1099‑INT reports interest income earned from financial institutions.
Form 1099‑INT reports interest income earned from financial institutions.
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