TheoryEnrolled Agent Practice Questions
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Enrolled Agent Questions
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Q1A taxpayer's spouse died in Year 1. In Years 2 and 3, the taxpayer maintains a home as the principal residence for a dependent child and does not remarry. What is the most favorable filing status available in Year 3?
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✓ Correct answer: Qualifying Surviving Spouse
Qualifying Surviving Spouse (formerly 'Qualifying Widow(er)') status allows the taxpayer to use the Married Filing Jointly rates for the two tax years following the year of the spouse's death, provided the taxpayer maintains a household for a dependent child and does not remarry, so Year 3 is the second year and still qualifies.
Q2Two unmarried parents live apart. Their son lives with Mother all year. Father provides 60% of the son's total support and signs Form 8332 releasing the exemption to Mother. Who may claim the son as a qualifying child for the Earned Income Credit?
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✓ Correct answer: Mother, because the son lived with her for more than half the year.
Form 8332 transfers the dependency exemption (and child tax credit) to the noncustodial parent, but it does NOT transfer the Earned Income Credit; the EIC is based on the residency test (qualifying child must live with the taxpayer more than half the year), so only the custodial parent — Mother — may claim the EIC.
Q3Which filing status is available ONLY to a taxpayer who is legally married on the last day of the tax year or whose spouse died during the tax year?
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✓ Correct answer: Married Filing Jointly
Married Filing Jointly requires the taxpayers to be married as of December 31 of the tax year (or for one spouse to have died during the year without remarriage), making it the status exclusively tied to legal marital status at year-end.
Q4A taxpayer's elderly mother lived in a nursing home all year. The taxpayer paid 80% of her mother's total support. The mother had Social Security income of $9,000, which was entirely excluded from gross income. Which statement is correct regarding the mother's dependency status?
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✓ Correct answer: The mother qualifies as a qualifying relative because Social Security benefits excluded from gross income do not count toward the gross income test.
For the qualifying relative gross income test, only amounts included in gross income are counted; tax-exempt Social Security benefits are excluded from gross income and therefore do not count, so the mother's gross income for dependency purposes is zero.
Q5A taxpayer is legally separated under a decree of separate maintenance issued by a court as of December 31. How is this taxpayer's filing status determined?
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✓ Correct answer: Unmarried, because the IRS treats a taxpayer under a decree of separate maintenance as unmarried for filing status purposes.
IRS rules treat a taxpayer who is legally separated under a decree of divorce or separate maintenance as unmarried at year-end, allowing them to file as Single or, if they qualify, Head of Household — not as a married person.
Q6A taxpayer's nephew lived with the taxpayer all year. The nephew is 28 years old, permanently and totally disabled, has no income, and the taxpayer provides all of his support. Can the nephew be claimed as a qualifying child?
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✓ Correct answer: Yes, because a nephew is an eligible relationship and the permanent disability exception removes the age cap.
A nephew is an eligible relationship for the qualifying child test, and when an individual is permanently and totally disabled, there is no upper age limit under the qualifying child rules, so a disabled 28-year-old nephew who lives with the taxpayer and meets the other tests qualifies.
Q7A head of household claimant must pay more than half the cost of keeping up a home for a qualifying person. Which of the following costs counts toward 'keeping up a home' for this test?
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✓ Correct answer: Rent, mortgage interest, property taxes, utilities, and food eaten in the home.
Costs of keeping up a home include rent or mortgage interest, property taxes, utilities, repairs, and food consumed in the home; clothing, education, medical care outside the home, and life insurance are specifically excluded from this calculation.
Q8A single taxpayer has no gross income for the year and is not claimed as a dependent by anyone else. Which statement about their filing requirement is most accurate?
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✓ Correct answer: They are generally not required to file a federal income tax return.
A taxpayer's obligation to file is triggered when gross income meets or exceeds the filing threshold (roughly the standard deduction amount for their filing status and age); a taxpayer with no gross income generally has no filing requirement, though they may choose to file to claim refundable credits.
Q9Spouses file Married Filing Separately. One spouse itemizes deductions. What must the other spouse do?
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✓ Correct answer: The other spouse must also itemize deductions, even if the itemized amount is zero.
When spouses file separately and one spouse itemizes deductions, the other spouse's standard deduction is reduced to zero and they must also itemize — a specific rule that makes MFS costly when deductions are unequal.
Q10A taxpayer provides 55% of her adult brother's support. The brother lives in his own apartment, earns $500 in gross income for the year, and is 30 years old. Which dependency test applies, and does the brother qualify?
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✓ Correct answer: Qualifying relative test applies; the brother qualifies because his gross income is below the threshold and more than half of his support is provided by the taxpayer.
A brother is a qualifying relative (not a qualifying child at age 30 and not living with the taxpayer); a sibling does not need to live in the taxpayer's home to satisfy the relationship test for qualifying relative, and $500 gross income is below the threshold, so the brother qualifies.
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