Enrolled Agent Part 2: Business Taxation Study Guide

2026-07-08

Last reviewed: July 9, 2026. This article reflects current IRS rules and EA exam requirements as of this date.

Part 2 (Businesses) covers entities, tax preparation, and specialized returns. 100 questions, 3.5 hours. Here's the full breakdown.

Section 1: Business Entities and Considerations

What's tested: Sole proprietorships, partnerships, S corporations, C corporations, LLCs, entity classification rules, formation and liquidation, and the differences between entity types.

Entity choice drives everything. Know which forms each entity files (Schedule C, Form 1065, Form 1120S, Form 1120). Understand the flow-through vs double-taxation distinction. Memorize the S-corp eligibility requirements (100 shareholders max, one class of stock, eligible shareholders only).

Free practice: 498 questions on Business Entities →

Section 2: Business Tax Preparation

What's tested: Depreciation (MACRS, Section 179, bonus depreciation), basis adjustments, listed property, self-employment tax, payroll taxes, and business deductions.

Depreciation is the heavy hitter. MACRS recovery periods (3, 5, 7, 10, 15, 20, 27.5, 39 years. Know which assets go where). Section 179 limits and phaseout. Bonus depreciation percentages. These are pure memorization. Flashcards work perfectly here.

Free practice: 275 questions on Business Tax Preparation →

Section 3: Specialized Returns and Taxpayers

What's tested: Farming, nonprofit organizations, retirement plans (SEP, SIMPLE, 401k), and estate/trust taxation.

Less heavily tested but still examinable. Focus on retirement plan contribution limits and employer requirements. Know the farming accounting methods (cash vs accrual, crop insurance treatment).

Free practice: 133 questions on Specialized Business Returns →

Mock Exams

Three full-length Part 2 mock exams available with 98, 95, and 98 questions each. Take them timed to simulate exam conditions.

Start Part 2 practice →