Taxation & Computation

Topic: 26-27EA Part 1-Section 1- Preliminary Work and Taxpayer Data Topic: 26-27EA Part 1 -Section 4-Taxation Topic: 26-27EA Part 1 -Section 5 - Advising the Individual Taxpayer For 2025, the IRS expanded Direct Pay capabilities so that businesses can use it to pay balances due, estimated taxes, and Federal Tax Deposits (FTDs) directly from a bank account without fees, and schedule them up to a year in advance. Correct Answer Explanation for A: For federal tax purposes, civil unions and register

Distributions from an inherited Roth IRA to a surviving spouse are generally tax-free, just like they would have been for the original owner of the IRA. Surviving spouses can also treat the account as they would their own. Topic: 26-27EA Part 1 -Section 5 - Advising the Individual Taxpayer

Distributions from an inherited Roth IRA to a surviving spouse are generally tax-free, just like they would have been for the original owner of the IRA. Surviving spouses can also treat the account as they would their own. Topic: 26-27EA Part 1 -Section 5 - Advising the Individual Taxpayer

Crop insurance proceeds of $600 or more made in a trade or business would be reported on Form 1099-MISC. None of the other answers are correct. Payments of non-employee compensation of $600 or more are reported on Form 1099-NEC, not 1099-MISC. A payment of rent of $400 is under the $600 reporting threshold for rents. A payment of $5 in royalties is also under the reporting threshold for royalties (which is $10). (This question is based on a prior year released EA exam question for Part 1). Topi

Independent Contractors reporting net earnings from self-employment of $400 or more typically must pay self-employment tax on their earnings and file Schedule SE to report their self-employment tax. See Tax Topic No. 554, Self-Employment Tax, for more information. (This question is based on an actual IRS question from a former IRS exam). Topic: 26-27EA Part 1-Section 2- Income and Assets

Topic: 26-27EA Part 1-Section 1- Preliminary Work and Taxpayer Data Topic: 26-27EA Part 1 -Section 4-Taxation The law sets the AMT exemption amounts and AMT tax rates. Taxpayers can use the special capital gain rates in effect for the regular tax if they're lower than the AMT tax rates that would otherwise apply. In addition, some tax credits that reduce regular tax liability don't reduce AMT tax liability. Topic: 26-27EA Part 1 -Section 5 - Advising the Individual Taxpayer In general, compute t

A calendar-year corporation’s tax year ends December 31. Therefore, its estimated tax payments are due on April 15, June 15, September 15, and December 15. Generally, a corporation must make installment payments if it expects its estimated tax for the year to be $500 or more during the year. See IRS Publication 542, Corporations, for more information. Topic: 26-27 EA PART2 Mock Exam 3

Corporations are required to make estimated tax payments if they expect their tax due to be $500 or more during the taxable year. Penalties apply if estimated tax payments are not made on time. Most business entities, including corporations, are now required to use EFTPS to make their estimated tax payments. Installments are due on a quarterly basis, on the fifteenth day of the fourth, sixth, ninth, and twelfth months of the corporation’s taxable year. Thus, a calendar-year corporation is requir

Employers are required to withhold payroll taxes and income tax from employees' pay. Employers use Form W-4 to determine how much income tax to withhold from employee pay. Topic: 26-27EA Part 2-Section 1-Business Entities and Considerations

The amount of the TFRP (Trust Fund Recovery Penalty) is equal to the unpaid balance of the trust fund taxes, hence it is called the “100% penalty.” The trust fund recovery penalty (TFRP) is a severe penalty charged against an employer knowingly or willfully not remitting employee FICA and income taxes owed to the IRS. Topic: 26-27EA Part 2-Section 1-Business Entities and Considerations

Income earned by a sole proprietor would be subject to self-employment tax. This includes income by a qualified farmer or fisherman. The other choices would be subject to income tax, but generally not subject to self-employment tax. Topic: 26-27 EA PART2 Mock Exam 2

The Kiddie Tax comes into effect when a child has unearned income above $2,700 in 2025. For 2025, the first $1,350 of a child's unearned income qualifies for the standard deduction, the next $1,350 is taxed at the child's income tax rate, and unearned income above $2,700 is taxed at the parent's marginal income tax rate. Topic: 26-27EA Part 1 -Section 4-Taxation

The Kiddie Tax comes into effect when a child has unearned income above $2,700 in 2025. For 2025, the first $1,350 of a child's unearned income qualifies for the standard deduction, the next $1,350 is taxed at the child's income tax rate, and unearned income above $2,700 is taxed at the parent's marginal income tax rate. Topic: 26-27EA Part 1 -Section 4-Taxation

The "kiddie tax" applies when a child’s investment income exceeds $2,700 in 2025. For 2025, the first $1,350 of a child's unearned income qualifies for the standard deduction, the next $1,350 is taxed at the child's income tax rate, and unearned income above $2,700 is subject to the "kiddie tax" by being taxed at the parent's marginal income tax rate. For this purpose, “unearned income” includes all taxable income other than earned income, such as taxable interest, ordinary dividends, capital ga