Texas Enrolled Agent Practice Exam
Questions And Correct Answers
(Verified Answers) Plus Rationales
2026|2027 Q&A | Instant Download Pdf
1. Which of the following is a requirement for an individual to qualify as
a dependent under the Qualifying Child rules?
A. The individual must be under age 24
B. The individual must be under age 19, or under 24 and a full-time student
C. The individual must have gross income less than the exemption amount
D. The individual must be married
To qualify as a qualifying child, the individual must be under 19 at the end
of the year, or under 24 if a full-time student, and younger than the
taxpayer.
2. Which of the following types of income is NOT taxable?
A. Interest on a corporate bond
B. Interest on municipal bonds
C. Interest on U.S. Treasury bills
D. Interest on savings accounts
,Municipal bond interest is excluded from federal income tax.
3. What is the maximum amount a taxpayer can contribute to a
traditional IRA in 2025 (under age 50)?
A. $5,000
B. $7,000
C. $6,500
D. $6,000
For 2025, the contribution limit is $7,000 for taxpayers under age 50.
4. When must a taxpayer file Form 1040 for the 2024 tax year?
A. April 1, 2025
B. April 15, 2025
C. May 15, 2025
D. March 15, 2025
The due date for filing Form 1040 for the prior tax year is April 15 unless it
falls on a weekend or holiday.
5. A taxpayer received a CP2000 notice from the IRS. What does this
notice indicate?
A. Audit initiation
B. A proposed change due to income matching discrepancies
C. Tax lien
D. Identity theft
,The CP2000 notice is issued when the IRS finds discrepancies between a
return and third-party income documents (e.g., W-2s, 1099s).
6. Which of the following expenses is deductible as an adjustment to
income?
A. Charitable contributions
B. Real estate taxes
C. Student loan interest
D. Medical expenses
Student loan interest is an above-the-line deduction (adjustment to
income), up to $2,500.
7. Which form is used to claim the Earned Income Tax Credit (EITC)?
A. Schedule A
B. Form 8863
C. Schedule EIC
D. Form 2441
Schedule EIC is used to provide the required information about qualifying
children for the EITC.
8. Which of the following is considered passive income?
A. Wages
B. Dividends
C. Rental income
D. Tips
, Rental income is generally considered passive unless the taxpayer is a real
estate professional.
9. In which situation can the IRS impose a 20% accuracy-related penalty?
A. Underpayment of estimated taxes
B. Substantial understatement of income tax
C. Failure to file a return
D. Filing after the deadline with an extension
A 20% penalty may apply when a taxpayer substantially understates their
income tax or negligently files.
10. What is the standard deduction for a single filer in tax year
2025?
A. $12,550
B. $14,000
C. $14,600
D. $15,000
The standard deduction for single filers in 2025 is $14,600.
11. A taxpayer sells a rental property. Which IRS form is used to
report the sale?
A. Schedule E
B. Form 4797
C. Form 8829
D. Form 1098
Questions And Correct Answers
(Verified Answers) Plus Rationales
2026|2027 Q&A | Instant Download Pdf
1. Which of the following is a requirement for an individual to qualify as
a dependent under the Qualifying Child rules?
A. The individual must be under age 24
B. The individual must be under age 19, or under 24 and a full-time student
C. The individual must have gross income less than the exemption amount
D. The individual must be married
To qualify as a qualifying child, the individual must be under 19 at the end
of the year, or under 24 if a full-time student, and younger than the
taxpayer.
2. Which of the following types of income is NOT taxable?
A. Interest on a corporate bond
B. Interest on municipal bonds
C. Interest on U.S. Treasury bills
D. Interest on savings accounts
,Municipal bond interest is excluded from federal income tax.
3. What is the maximum amount a taxpayer can contribute to a
traditional IRA in 2025 (under age 50)?
A. $5,000
B. $7,000
C. $6,500
D. $6,000
For 2025, the contribution limit is $7,000 for taxpayers under age 50.
4. When must a taxpayer file Form 1040 for the 2024 tax year?
A. April 1, 2025
B. April 15, 2025
C. May 15, 2025
D. March 15, 2025
The due date for filing Form 1040 for the prior tax year is April 15 unless it
falls on a weekend or holiday.
5. A taxpayer received a CP2000 notice from the IRS. What does this
notice indicate?
A. Audit initiation
B. A proposed change due to income matching discrepancies
C. Tax lien
D. Identity theft
,The CP2000 notice is issued when the IRS finds discrepancies between a
return and third-party income documents (e.g., W-2s, 1099s).
6. Which of the following expenses is deductible as an adjustment to
income?
A. Charitable contributions
B. Real estate taxes
C. Student loan interest
D. Medical expenses
Student loan interest is an above-the-line deduction (adjustment to
income), up to $2,500.
7. Which form is used to claim the Earned Income Tax Credit (EITC)?
A. Schedule A
B. Form 8863
C. Schedule EIC
D. Form 2441
Schedule EIC is used to provide the required information about qualifying
children for the EITC.
8. Which of the following is considered passive income?
A. Wages
B. Dividends
C. Rental income
D. Tips
, Rental income is generally considered passive unless the taxpayer is a real
estate professional.
9. In which situation can the IRS impose a 20% accuracy-related penalty?
A. Underpayment of estimated taxes
B. Substantial understatement of income tax
C. Failure to file a return
D. Filing after the deadline with an extension
A 20% penalty may apply when a taxpayer substantially understates their
income tax or negligently files.
10. What is the standard deduction for a single filer in tax year
2025?
A. $12,550
B. $14,000
C. $14,600
D. $15,000
The standard deduction for single filers in 2025 is $14,600.
11. A taxpayer sells a rental property. Which IRS form is used to
report the sale?
A. Schedule E
B. Form 4797
C. Form 8829
D. Form 1098
