Enrolled Agent Exam Part 1 (Individual) Free Mock Test

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Enrolled Agent Exam Part 1 (Individual) Free Mock Test - 2

Welcome to our free Enrolled Agent Exam Part 1 (Individual) mock test - a valuable resource for individuals preparing for the EA exam, aspiring CPAs, and US tax professionals. This specially curated test is designed to help you gauge your knowledge and readiness for the Part 1 section of the Enrolled Agent Exam.

1. What is the penalty for failing to file a tax return if you owe taxes and do not request an extension?

1 point

A. 5% of the unpaid tax for each month the return is late, up to a maximum of 25%.

B. 10% of the unpaid tax for each month the return is late, up to a maximum of 50%.

C. $50 per month for each month the return is late.

D. There is no penalty for late filing.

Clear selection

2. Which of the following statements is true regarding the taxation of Social Security benefits?

1 point

A. Social Security benefits are always 100% taxable.

B. Social Security benefits are tax-free for all recipients.

C. The amount of Social Security benefits subject to taxation depends on the taxpayer's total income.

D. Only individuals over the age of 70 are subject to taxation on Social Security benefits.

Clear selection

3. A taxpayer contributes $2,000 to a traditional IRA and $2,000 to a Roth IRA in the same tax year. How much of these contributions are tax-deductible?

1 point

A. $0

B. $2,000

C. $4,000

D. It depends on the taxpayer's income.

Clear selection

4. Which of the following statements is correct regarding the taxation of unemployment benefits?

1 point

A. Unemployment benefits are never subject to federal income tax.

B. Unemployment benefits are always fully taxable.

C. Unemployment benefits are only taxable if the taxpayer's income exceeds $100,000.

D. Unemployment benefits may be subject to federal income tax, depending on the taxpayer's total income.

Clear selection

5. A taxpayer receives a notice from the IRS requesting additional documentation to support certain deductions claimed on their tax return. What should the taxpayer do?

1 point

A. Ignore the notice; it's likely a mistake.

B. Gather and submit the requested documentation promptly.

C. Amend their tax return to remove the deductions.

D. Contact the local police department.

Clear selection

6. Which of the following statements is true about the Alternative Minimum Tax (AMT)?

0 points

A. The AMT only affects high-income individuals.

B. Taxpayers can claim all their itemized deductions when calculating the AMT.

C. The AMT is a parallel tax system designed to ensure that high-income taxpayers pay a minimum amount of tax.

D. The AMT only applies to corporate taxpayers.

Clear selection

7. A taxpayer is eligible to claim the Lifetime Learning Credit. What expenses can they use to calculate this credit?

1 point

A. Tuition, fees, and required course materials.

B. Tuition and fees only.

C. Room and board expenses.

D. Transportation costs to and from the educational institution.

Clear selection

8. Which of the following is an example of a tax-exempt income source?

1 point

A. Rental income from a residential property.

B. Interest income from a savings account.

C. Social Security benefits.

D. Dividend income from stock investments.

Clear selection

9. When does the IRS require taxpayers to make estimated tax payments?

1 point

A. Only when they owe more than $1,000 in taxes.

B. Only when they are self-employed.

C. If their withholding and credits will not cover their tax liability.

D. Never; estimated tax payments are optional.

Clear selection

10. A taxpayer has a capital loss of $4,000 and a capital gain of $2,000 in the same tax year. How much of the capital loss can the taxpayer deduct on their tax return?

1 point

A. $0

B. $1,000

C. $2,000

D. $4,000

Clear selection

11. Which of the following tax credits is specifically designed to encourage energy-efficient home improvements?

1 point

A. Earned Income Tax Credit (EITC)

B. Child Tax Credit

C. Residential Energy Efficient Property Credit

D. Additional Child Tax Credit

Clear selection

12. If a taxpayer receives a refund due to overpayment of federal income tax, how is it generally treated for tax purposes?

1 point

A. It is tax-free and does not need to be reported.

B. It is fully taxable as ordinary income.

C. It is partially taxable, depending on the taxpayer's income.

D. It is taxable, but only if the taxpayer itemizes deductions.

Clear selection

13. Which of the following is NOT a tax-deductible expense for a self-employed individual?

1 point

A. Health insurance premiums.

B. Home office expenses.

C. Interest on a personal car loan.

D. Business-related travel expenses.

Clear selection

14. What is the purpose of Form W-4, Employee's Withholding Certificate?

1 point

A. To report income earned from self-employment.

B. To request additional time to file a tax return.

C. To specify the amount of federal income tax to withhold from an employee's paycheck.

D. To report capital gains and losses.

Clear selection

15. A taxpayer owes federal income tax for the current year but cannot pay the full amount by the due date. What should the taxpayer do to avoid penalties and interest?

1 point

A. Ignore the tax bill; it will go away on its own.

B. File an extension to delay the payment deadline.

C. Pay as much as possible by the due date and set up a payment plan with the IRS.

D. Pay the entire amount in full to avoid penalties.

Clear selection

16. Which of the following filing statuses allows a taxpayer to claim the Head of Household standard deduction?

1 point

A. Single

B. Married Filing Jointly

C. Qualifying Widow/Widower

D. Married Filing Separately

Clear selection

17. What is the purpose of IRS Form 8867, Paid Preparer's Earned Income Credit Checklist?

1 point

A. To determine a taxpayer's eligibility for the Child Tax Credit.

B. To assess the accuracy of a tax return prepared by a paid tax preparer.

C. To calculate the Alternative Minimum Tax (AMT).

D. To report foreign income.

Clear selection

18. Which of the following types of income is typically not subject to federal income tax?

1 point

A. Interest income from a savings account.

B. Rental income from a residential property.

C. Wages earned from a part-time job.

D. Alimony received.

Clear selection

19. A taxpayer can make tax-deductible contributions to which of the following retirement accounts?

1 point

A. Traditional IRA (Individual Retirement Account)

B. Roth IRA (Individual Retirement Account)

C. Both A and B

D. Neither A nor B

Clear selection

20. Which of the following is true about the Earned Income Tax Credit (EITC)?

1 point

A. It is available only to individuals with children.

B. It is a refundable tax credit designed to assist low-income individuals and families.

C. It is not available to self-employed individuals.

D. It reduces a taxpayer's tax liability by a fixed amount.

Clear selection

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