Preliminary Work and Taxpayer Data
16.5%of exam
Income and Assets
20%of exam
Deductions and Credits
20%of exam
Taxation
17.6%of exam
Advising the Individual Taxpayer
12.9%of exam
Specialized Returns for Individuals
12.9%of exam
Quick Facts
- Exam
- SEE Part 1 — Individuals
- Questions
- 100 items, 85 scored
- Time
- 3.5 hours, 4-hour seat
- Pass
- 500 scaled (200-800)
- Fee
- $317 per part
- Window
- July 1 2026-Feb 28 2027
- Tax law tested
- Through December 31, 2025
- Prerequisite
- Active PTIN required
- Delivery
- PSI center or remote
- Attempts
- Four per testing window
- Breaks
- Two scheduled 10-minute breaks
- Materials
- Closed book, onscreen calculator
Qualifying Child Tests
Relationship, Age, Residency, Support, Joint, Citizen
Relationship: family memberAge: under 19 or 24Residency: over half yearSupport: child under halfJoint: no joint returnCitizen: US, Canada, Mexico
Qualifying Child vs Relative
Qualifying child
- Age or student test
- Lives over half year
- Child provides under half
Qualifying relative
- Any age allowed
- Gross income under $5,200
- You provide over half
Age tests vs income
Which Filing Status?
- Married on December 31→MFJ or MFS(Joint usually lower)
- Spouse died during 2025→MFJ(Year of death)
- Spouse died 2023-2024→QSS(Dependent child required)
- Unmarried with qualifying person→HOH(Over half home cost)
- Considered unmarried, child→HOH(Spouse absent six months)
- Supports dependent parent→HOH(Parent may live elsewhere)
- None of these→Single
Scored Items by Domain
- Preliminary work
- 14 of 85 items
- Income and assets
- 17 of 85 items
- Deductions and credits
- 17 of 85 items
- Taxation
- 15 of 85 items
- Advising the taxpayer
- 11 of 85 items
- Specialized returns
- 11 of 85 items
- Experimental questions
- 15 unscored items
HOH vs Qualifying Surviving Spouse
Head of household
- Unmarried or considered unmarried
- Any qualifying person
- $23,625 deduction (2025)
Surviving spouse
- Two years after death
- Dependent child only
- $31,500 deduction (2025)
Any dependent vs child
Qualifying Child or Relative?
- Under 19 and resident→Qualifying child(Support test reversed)
- Age 19-23 full-time student→Qualifying child(Student test)
- Permanently disabled child→Qualifying child(No age limit)
- Fails age test→Qualifying relative(Check gross income)
- Gross income reaches $5,200→No dependent(2025 limit)
- Unrelated household member→Qualifying relative(Whole-year residence)
- Two taxpayers claim→Tiebreaker rules(Nights, then AGI)
Filing Status Rules
- Status date
- December 31 marital status
- Single
- Unmarried, no better status
- MFJ
- Joint and several liability
- MFS
- Separate liability, credits lost
- HOH
- Unmarried, over half homeQualifying person
- QSS
- Two years after deathDependent child
- Considered unmarried
- Spouse absent last six months
- Dependent parent
- HOH without living together
Dependency Tests
- QC relationship
- Child, sibling, or descendant
- QC age
- Under 19, student 24Or disabled
- QC residency
- Over half year together
- QC support
- Child provides under half
- QR gross income
- Under $5,200 (2025)
- QR support
- Taxpayer provides over half
- QR relationship
- Relative or whole-year member
- Tiebreaker
- Parent, then higher AGI
- Joint return test
- No joint return filed
- Citizen test
- US, Canada, or Mexico
2025 Filing Thresholds
- Single under 65
- $15,750 gross income
- Single 65 or older
- $17,750 gross income
- MFJ both under 65
- $31,500 gross income
- MFJ one spouse 65
- $33,100 gross income
- MFJ both 65
- $34,700 gross income
- Head of household
- $23,625 gross income
- HOH 65 or older
- $25,625 gross income
- Married filing separately
- $5 gross income
- Self-employment
- $400 net earnings
- Dependent floor
- $1,350 or earned plus $450
Residency and IDs
- Green card test
- Lawful permanent resident
- Substantial presence
- 31 days plus 183 weighted
- Day weighting
- 1, 1/3, 1/6
- Closer connection
- Escapes resident status
- Resident alien
- Taxed on worldwide income
- ITIN
- For SSN-ineligible filers
- IP PIN
- Six digits, reissued yearly
- Nonresident return
- Form 1040-NR
Due Dates 2025 Returns
- Form 1040
- April 15, 2026
- Form 4868
- Extends to October 15Filing only
- Estimate 1
- April 15, 2025
- Estimate 2
- June 16, 2025
- Estimate 3
- September 15, 2025
- Estimate 4
- January 15, 2026
- Form 709
- April 15, 2026
- Form 706
- Nine months after death
- FBAR
- April 15, automatic October
- Refund claim
- Later of three, two
Capital Gain Rate Ladder
0, 15, 20, then 25 and 28
0% to $48,350 single15% to $533,400 single25% unrecaptured 125028% collectibles
Traditional vs Roth IRA
Traditional IRA
- Deduction may apply
- Distributions taxable
- RMDs begin at 73
Roth IRA
- No deduction allowed
- Qualified distributions tax-free
- No lifetime RMDs
Deduct now vs later
Taxable or Excludable?
- Employer paid wages→Taxable(Form W-2)
- Gift received→Excludable(Donor may file 709)
- Life insurance death benefit→Excludable(Interest is taxable)
- Debt cancelled while insolvent→Excludable(Form 982 limit)
- Main home gain→Excludable to limit(Two of five years)
- Municipal bond interest→Excludable(Raises provisional income)
- Scholarship covering room→Taxable(Tuition portion excluded)
- State refund, previously itemized→Taxable(Tax benefit rule)
Taxable Income Items
- Wages
- Form W-2 box 1
- Unemployment
- Fully taxable
- Gambling winnings
- Losses only if itemizing
- Alimony pre-2019
- Taxable to recipient
- Cancelled debt
- Form 1099-C income
- Hobby income
- Taxable, expenses nondeductible
- Bartering
- Fair market value income
- Illegal income
- Still reportable
- Constructive receipt
- Available without substantial restriction
- State refund
- Taxable if previously itemized
Gift vs Inherited Basis
Gifted property
- Carryover donor basis
- Dual basis for losses
- Donor holding period
Inherited property
- Value at death
- Always long-term
- Alternate valuation possible
Carryover vs stepped up
Excluded Income Items
- Gifts and inheritances
- Not recipient income
- Life insurance proceeds
- Death benefit excluded
- Municipal interest
- Excluded, raises provisional income
- Child support
- Never taxable
- Qualified scholarship
- Tuition, fees, books only
- Insolvency discharge
- Excluded up to insolvency
- Section 121 gain
- $250,000 or $500,000
- Roth qualified distribution
- Five years plus event
- Foreign earned income
- $130,000 exclusion (2025)
- Combat pay
- Excluded, elective for EITC
Basis and Holding Period
- Purchased asset
- Cost plus improvements
- Gift, gain basis
- Donor carryover basis
- Gift, loss basis
- Value at gift date
- Price between both
- No gain or loss
- Inherited property
- Value at deathAlways long-term
- Alternate valuation
- Six months after death
- Wash sale
- Loss added to basis
- Stock split
- Spread basis, holding tacks
- Long-term
- Held over one year
2025 Capital Gain Rates
- 0% ends single
- $48,350 taxable income
- 0% ends joint
- $96,700 taxable income
- 0% ends HOH
- $64,750 taxable income
- 15% ends single
- $533,400 taxable income
- 15% ends joint
- $600,050 taxable income
- Collectibles
- 28% maximum rate
- Unrecaptured 1250
- 25% maximum rate
- Section 1245 recapture
- Ordinary income
- Capital loss limit
- $3,000; $1,500 separate
Retirement Distributions
- RMD start age
- 73 under SECURE 2.0
- Missed RMD
- 25%, 10% if corrected
- Roth owner RMD
- None during lifetime
- Early distribution
- 10% before age 59½
- First-time home
- $10,000 lifetime exception
- Rollover window
- 60 days, one yearly
- QCD limit
- $108,000 for 2025Age 70½
- Form 8606
- Nondeductible IRA basis
- Provisional income
- AGI, exempt interest, half
- 50% tier
- $25,000 single, $32,000 joint
- 85% tier
- $34,000 single, $44,000 joint
Above-the-Line Adjustments
- Educator expenses
- $300 each educator (2025)
- HSA contribution
- $4,300 self, $8,550 family
- HSA catch-up
- $1,000 at age 55
- HDHP minimum deductible
- $1,650 self, $3,300 family
- IRA limit
- $7,000 plus $1,000 catch-up
- Student loan interest
- $2,500 maximum, phases out
- Half SE tax
- Deducted on Schedule 1
- SE health insurance
- Capped by business income
- Alimony paid
- Pre-2019 decrees only
- Moving expenses
- Active military only
2025 Standard Deduction
15,750 single | 23,625 head | 31,500 joint
Single: $15,750Head of household: $23,625Joint: $31,500Extra 65: $2,000 unmarried
Above vs Below the Line
Above-the-line
- Reduces AGI directly
- No itemizing needed
- HSA, IRA, half SE
Below-the-line
- Reduces taxable income
- Standard or itemized
- Tips, overtime, senior
AGI first, taxable second
Which Credit Applies?
- Child under 17→Child tax credit($2,200 for 2025)
- Dependent over 16→Other dependent credit($500 nonrefundable)
- Care needed to work→Form 2441 credit(Provider TIN required)
- First four college years→AOTC(40% refundable)
- Graduate or single course→Lifetime Learning(Nonrefundable)
- Low earned income→EITC(Investment limit $11,950)
- Foreign tax paid→Form 1116 credit(Or itemized deduction)
- Adoption expenses paid→Form 8839($5,000 refundable)
2025 Standard Deduction
- Single or MFS
- $15,750 for 2025
- Married filing jointly
- $31,500 for 2025
- Qualifying surviving spouse
- $31,500 for 2025
- Head of household
- $23,625 for 2025
- Age 65 or blind
- $2,000 unmarried, $1,600 married
- Senior deduction
- $6,000 extra, age 65
- Senior phase-out
- $75,000; $150,000 joint
- Dependent minimum
- $1,350 for 2025
- MFS rule
- Both itemize or neither
Credit vs Deduction
Credit
- Cuts tax directly
- May be refundable
- CTC, EITC, AOTC
Deduction
- Cuts taxable income
- Worth marginal rate
- SALT, mortgage, charity
Dollar vs bracket value
Itemized Deduction Limits
- Medical floor
- 7.5% of AGI
- SALT cap
- $40,000; $20,000 separate
- SALT phase-down
- 30% over $500,000 MAGI
- SALT floor
- Never below $10,000
- Acquisition debt
- $750,000 after 2017
- Older mortgage debt
- $1,000,000 grandfathered
- Home equity interest
- Only if improving home
- Cash charity limit
- 60% of AGI
- Charity receipt
- $250 written acknowledgment
- Casualty loss
- Disaster, $100, 10% AGI
- Investment interest
- Capped by investment income
AOTC vs Lifetime Learning
AOTC
- $2,500 per student
- 40% refundable
- First four years
Lifetime Learning
- $2,000 per return
- Nonrefundable
- Any coursework, unlimited years
Per student vs return
Family Credits 2025
- Child tax credit
- $2,200 per child
- Refundable portion
- Up to $1,700
- ACTC formula
- 15% over $2,500 earned
- CTC phase-out
- $200,000; $400,000 joint
- Other dependent credit
- $500 nonrefundable
- Care expense cap
- $3,000 one, $6,000 two
- Care credit rate
- 35% down to 20%
- Adoption credit
- $17,280 per child
- Adoption refundable
- Up to $5,000
- EITC maximum
- $8,046 with three children
- EITC investment limit
- $11,950 for 2025
- Childless EITC ages
- 25 through 64
Education Credits 2025
- AOTC maximum
- $2,500 per student
- AOTC refundable
- 40%, up to $1,000
- AOTC limits
- Four years, half-time enrollment
- AOTC phase-out
- $80,000; $160,000 joint
- Lifetime Learning
- $2,000 per return
- LLC features
- Nonrefundable, unlimited years
- 529 nonqualified
- Earnings taxed plus 10%
- 529 K-12 limit
- $10,000 each year
- 529 loan payoff
- $10,000 lifetime per beneficiary
New 2025 Deductions
- Tips deduction
- Up to $25,000
- Overtime deduction
- $12,500; $25,000 joint
- Tips/overtime phase-out
- $150,000; $300,000 joint
- Car loan interest
- Up to $10,000
- Car loan rules
- US assembly, new vehicle
- Car loan phase-out
- $100,000; $200,000 joint
- Deduction placement
- Below the line
- Years available
- 2025 through 2028
- Married claimants
- Must file jointly
Self-Employment Tax Steps
Profit x 92.35%, then 15.3% total
12.4% Social Security2.9% MedicareBase: $176,100 (2025)Half deducted above line
NIIT vs Additional Medicare
Net investment tax
- 3.8% rate
- Investment income only
- Form 8960
Additional Medicare
- 0.9% rate
- Wages and SE income
- Form 8959
Portfolio vs earned income
Which Penalty Applies?
- Return filed late→Failure to file(5% monthly)
- Tax paid late→Failure to pay(0.5% monthly)
- Underpaid estimates→Form 2210 penalty(Check safe harbors)
- Substantial understatement→Accuracy-related penalty(20% of underpayment)
- Intent to evade→Civil fraud penalty(75% of underpayment)
- Over 60 days late→Minimum penalty($510 or $525 minimum)
Other Taxes 2025
- SE tax rate
- 15.3% after 92.35%
- Social Security wage base
- $176,100 for 2025
- Medicare portion
- 2.9%, no ceiling
- Additional Medicare tax
- 0.9% over threshold
- Additional Medicare thresholds
- $200,000; $250,000; $125,000
- NIIT rate
- 3.8% on lesser
- NIIT thresholds
- $200,000; $250,000; $125,000
- Excess Social Security
- Credit on Schedule 3
- Household employee wages
- $2,800 triggers FICA
- Household FUTA
- $1,000 in a quarter
- Schedule H
- Filed with Form 1040
- Church employee income
- $108.28 triggers SE tax
Estimated Tax Safe Harbors
90 current, 100 prior, 110 wealthy
90% of current tax100% of prior tax110% over $150,000 AGIUnder $1,000 owed
AMT and Kiddie Tax
- AMT exemption single
- $88,100 for 2025
- AMT exemption joint
- $137,000 for 2025
- AMT exemption MFS
- $68,500 for 2025
- AMT phase-out single
- Begins at $626,350
- AMT phase-out joint
- Begins at $1,252,700
- AMT credit
- Form 8801, deferral items
- Kiddie tax trigger
- Unearned over $2,700
- Kiddie tax tiers
- $1,350 free, $1,350 child
- Form 8615
- Parent rate computation
Kiddie Tax Tiers
1,350 free, 1,350 child, rest parent
First $1,350 untaxedNext $1,350 child rateOver $2,700 parent rateReported on Form 8615
Estimates and Penalties
- Safe harbor current
- 90% of current tax
- Safe harbor prior
- 100% of prior tax
- High-income safe harbor
- 110% over $150,000 AGI
- De minimis
- Under $1,000 balance
- Withholding timing
- Treated as paid evenly
- Failure to file
- 5% monthly, 25% maximum
- Failure to pay
- 0.5% monthly, 25% maximum
- Minimum late penalty
- $510 due 2025; $525 due 2026
- Accuracy-related penalty
- 20% of underpayment
- Civil fraud penalty
- 75% of underpayment
Injured vs Innocent Spouse
Injured spouse
- Form 8379
- Refund taken for debt
- Recovers own share
Innocent spouse
- Form 8857
- Other spouse's erroneous items
- Relief from liability
Refund split vs liability
Planning and Relief Forms
- Form 1040-X
- Amended individual return
- Form 2210
- Estimated tax penalty
- Form 8379
- Injured spouse allocation
- Form 8857
- Innocent spouse relief
- Form 982
- Discharged debt exclusion
- Form 8862
- Reclaim disallowed credits
- Form 1116
- Foreign tax credit
- Form 8960
- Net investment income tax
- Form 8959
- Additional Medicare tax
- Form 8332
- Release dependent exemption
Marriage and Divorce Rules
- Post-2018 alimony
- Neither deducted nor taxed
- Pre-2019 alimony
- Deductible unless modified
- Property settlement
- No gain recognized
- Community property
- Split income when separate
- Joint liability
- Either spouse fully liable
- Child support
- Neither deducted nor taxed
- Custodial parent
- Claims child by default
FBAR vs Form 8938
FBAR
- FinCEN Form 114
- Accounts over $10,000
- Filed on BSA system
Form 8938
- FATCA reporting
- Assets, not just accounts
- Attached to return
Separate filing vs return
Which Foreign Form?
- Accounts over $10,000→FinCEN Form 114(BSA e-filing system)
- Assets over $50,000→Form 8938(With Form 1040)
- Foreign earned wages→Form 2555($130,000 exclusion)
- Foreign tax paid→Form 1116(Credit election)
- Large foreign gift→Form 3520(Information return)
- Foreign corporation owner→Form 5471(Information return)
Estate and Gift 2025
- Annual gift exclusion
- $19,000 per donee
- Gift splitting
- $38,000 with spousal consent
- Basic exclusion amount
- $13,990,000 for 2025
- Form 706 trigger
- Estate over basic exclusion
- Portability election
- Needs timely Form 706
- Marital deduction
- Unlimited, citizen spouse
- Non-citizen spouse
- QDOT generally required
- Future interest gift
- No annual exclusion
- Unified credit
- Offsets gift and estate
Foreign Reporting Thresholds
- FBAR threshold
- Over $10,000 aggregate
- FBAR form
- FinCEN 114, BSA e-filing
- FBAR due date
- April 15, automatic extension
- Form 8938 single
- $50,000 year-end, $75,000 peak
- Form 8938 joint
- $100,000 year-end, $150,000 peak
- Living abroad single
- $200,000 year-end, $300,000 peak
- Form 8938 filing
- Attached to Form 1040
- Form 3520
- Foreign gifts and trusts
- Form 5471
- Foreign corporation ownership
Decedent Returns
- Final Form 1040
- Income through death date
- Income in respect
- No basis step-up
- IRD deduction
- Section 691(c) estate tax
- Form 1310
- Refund to claimant
- Year of death
- Joint return still allowed
- Estate income tax
- Form 1041 at $600
- Medical expenses
- Elect final return deduction
Common Traps
Extension vs payment
Form 4868 extends filing ≠ Tax still due April 15
FBAR vs tax return
FBAR goes to FinCEN ≠ Form 8938 attaches to 1040
Senior deduction vs additional
$6,000 senior deduction separate ≠ $2,000 extra standard deduction
Gross income test
Taxable Social Security counts ≠ Tax-exempt interest excluded
Gift vs inherited basis
Gift keeps donor basis ≠ Inheritance uses death value
Wash sale direction
Losses deferred into basis ≠ Gains always recognized
Roth distribution myth
Roth owner takes none ≠ Inherited Roth must distribute
SALT cap floor
$40,000 cap for 2025 ≠ Never reduced below $10,000
Refundable vs nonrefundable
ACTC refunds beyond tax ≠ Lifetime Learning never refunds
Filing status on December 31
Year-end status controls ≠ Death year still joint
Last Minute
- 1.85 scored items, 15 unscored
- 2.Passing score 500 scaled
- 3.Every question uses 2025 law
- 4.Standard deduction 15,750/23,625/31,500
- 5.Senior deduction $6,000 extra
- 6.Child credit $2,200; $1,700 refundable
- 7.SALT cap $40,000, floor $10,000
- 8.Qualifying relative income under $5,200
- 9.Kiddie tax over $2,700 unearned
- 10.Self-employment 15.3% after 92.35%
- 11.Wage base $176,100 for 2025
- 12.AMT exemptions $88,100 and $137,000
- 13.Gift exclusion $19,000 per donee
- 14.Estate exclusion $13,990,000 for 2025
- 15.FBAR over $10,000, FinCEN 114
- 16.Safe harbors 90/100/110 percent
- 17.Form 4868 extends filing only
- 18.Capital gains 0/15/20 rates
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HOCK International EA Review Part 1 - Individuals - Enrolled Agent Study Guide: July 1, 2026 - February 28, 2027 Testing Cycle (HOCK International EA ... 1, 2026 - February 28, 2027 Testing Cycle))
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