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Enrolled Agent ReadyStudyingPart 1
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Special Enrollment Examination
Part 1SEE Part 1: Individuals✓Part 2SEE Part 2: BusinessesPart 3SEE Part 3: Representation, Practices and ProceduresThe 2025 figures and rules the SEE leans on, on one page. The current window tests law as amended through 31 Dec 2025. Facts checked 12 Oct 2026; many amounts change every year, so check the source when a figure matters to you.
Enrolled Agent Ready is an independent study aid. It is not affiliated with, approved by or endorsed by the Internal Revenue Service (IRS), the US Department of the Treasury or PSI Services LLC. All practice questions are original; they are not real or past exam questions. A revision aid, not tax or legal advice.
Know the numbers? Now apply them.
Many questions put these figures into a taxpayer's facts and ask you to compute.
| Rule | What to remember | Source |
|---|---|---|
| The exam | 100 items per part (85 scored), 3 hours 30 min, 500 of 800 to pass | PSI bulletin (Aug 2026) |
| Standard deduction | $15,750 single/MFS; $31,500 MFJ/QSS; $23,625 HOH; +$2,000 (unmarried) or $1,600 per age/blind add-on | 2025 Form 1040 instr.; Rev. Proc. 2024-40 |
| Dependent standard deduction | Greater of $1,350 or earned income + $450, up to the regular amount | Rev. Proc. 2024-40 sec. 3.15 |
| Qualifying relative income | Gross income under $5,200 | Rev. Proc. 2024-40 sec. 3.24 |
| Kiddie tax | Unearned income over $2,700 taxed at parent's rate | Rev. Proc. 2024-40 sec. 3.02 |
| Child tax credit | $2,200 per child under 17; $1,700 refundable; phase-out $200,000 / $400,000 MFJ | IRC 24 (P.L. 119-21); Sch. 8812 instr. |
| SALT cap | $40,000 ($20,000 MFS); minus 30% of MAGI over $500,000; floor $10,000 | IRC 164(b)(7); Sch. A instr. |
| Schedule 1-A | Tips $25,000; overtime $12,500/$25,000; car loan interest $10,000; seniors $6,000 each | 2025 Sch. 1-A |
| 0% capital gains | Up to $48,350 single; $96,700 MFJ; $64,750 HOH | Rev. Proc. 2024-40 sec. 3.03 |
| IRA / 401(k) | IRA $7,000 (+$1,000 50+); 401(k) $23,500 (+$7,500; $11,250 ages 60-63) | Pub. 590-A; Pub. 560 (2025) |
| HSA | $4,300 self; $8,550 family; +$1,000 at 55 | Pub. 969 (2025) |
| Gift and estate | Annual exclusion $19,000; basic exclusion $13,990,000 | Rev. Proc. 2024-40 secs. 3.41, 3.43 |
| AMT exemption | $88,100 single; $137,000 MFJ; phase-out from $626,350 / $1,252,700 | Rev. Proc. 2024-40 sec. 3.11 |
| SS wage base | $176,100 | Pub. 15 |
| Section 179 / bonus | $2,500,000, phase-out from $4,000,000; 100% bonus if acquired after Jan 19, 2025 | Pub. 946 (2025) |
| Mileage | 70 cents business; 21 cents medical/moving; 14 cents charity | Notice 2025-5 |
| Circular 230 CE | 72 hours per 3-year cycle; 16 a year incl. 2 ethics | 31 CFR 10.6(e) |
| Statutes | Assess 3 years (6 if >25% omitted); collect 10 years; refund 3 years / 2 years | IRC 6501, 6502, 6511 |
| Preparer penalties (2026 filings) | $65 per failure, $32,500 cap; due diligence $650 per failure | Rev. Proc. 2024-40 sec. 3.55 |
| Installment agreements | Guaranteed: $10,000 within 3 years; streamlined: $50,000 within 72 months | IRC 6159; Form 9465 instr. |
Who must file a 2025 return, which of the five filing statuses applies, how large the standard deduction is, and who counts as a dependent. These rules sit at the start of every return, so the SEE tests them with short scenarios that turn on one date, one dollar limit or one relationship.
The information a preparer gathers before the return is built: prior-year carryovers, residency status for aliens, ITINs and IP PINs, IRS notices, the kiddie tax, premium tax credit data and special filings such as injured spouse claims. The SEE tests whether you spot the fact that changes how, or whether, a return is filed.
What counts as gross income for 2025 and when it is reported: wages and tips, interest, dividends, scholarships, barter, gambling, canceled debt, recoveries and the common exclusions. The SEE tests both the yes-or-no question (is it income?) and short computations of the taxable part.
How an individual reports rental and royalty income, handles vacation homes, and applies the basis, at-risk and passive activity limits to losses from rentals, partnerships and S corporations. Expect computations of the $25,000 allowance, vacation-home allocations and first-year rental depreciation.
How distributions from traditional and Roth IRAs, employer plans and annuities are taxed, when the 10% additional tax applies, how rollovers, RMDs and inherited accounts work, and how much of a Social Security benefit is taxable. The SEE mixes recall of limits and codes with short computations.
How to find basis for purchased, gifted and inherited property, how long a holding period must run, how capital gains and losses net, and the special regimes: wash sales, home sale exclusion, like-kind exchanges, installment sales and related-party losses. This is one of the most computation-heavy areas of Part 1.
The above-the-line adjustments on Schedule 1 (half of SE tax, IRA, HSA, self-employed health insurance, student loan interest, educator expenses and others) and the four new 2025 deductions on Schedule 1-A for tips, overtime, car loan interest and seniors. The SEE tests eligibility, dollar caps and the MAGI phase-downs, and whether a deduction lowers AGI.
Schedule A for 2025: medical expenses over 7.5% of AGI, the new $40,000 SALT cap and its phase-down, home mortgage and investment interest, charitable contributions and their substantiation, disaster casualty losses and the few other deductions still allowed. The note ends with the section 199A deduction for individuals, which is taken whether or not the taxpayer itemizes.
The family, education, earned income, adoption, foreign tax and energy credits for 2025, including the changes made by the One Big Beautiful Bill Act. The SEE tests who qualifies, the 2025 amounts and phase-outs, which credits are refundable, and which energy credits have ended.
The taxes added on top of regular income tax: alternative minimum tax, self-employment tax, Additional Medicare Tax, the net investment income tax, household employment taxes and the estimated tax penalty, plus clergy, military and decedent rules. The SEE pairs short computations with threshold recall, and most figures are 2025 amounts from Rev. Proc. 2024-40 or fixed statutory thresholds.
Planning questions in which the candidate picks the best advice: timing income and deductions, using basis and holding-period rules, choosing between joint and separate returns, handling divorce and community property, education and retirement planning, amending returns and spouse relief. The rules are covered elsewhere in Part 1; this domain tests whether you can apply them to a client's choice.
The unified transfer tax for 2025: the $19,000 annual exclusion, unlimited exclusions for tuition, medical and spousal gifts, gift splitting, the $13,990,000 basic exclusion, portability, what goes into the gross estate, and the Forms 706 and 709 filing rules. The SEE tests whether a return is required and how much of a gift is taxable.
The reporting duties of US persons with foreign accounts, assets, gifts and entities: the FBAR, Form 8938, Forms 3520, 5471 and 8865, treaty disclosure, and the foreign earned income exclusion. The SEE tests thresholds and the difference between the FBAR and Form 8938, which overlap but are separate filings under separate laws.
How a business is classified for federal tax purposes, which elections change that result and when they must be filed, the required tax year and return due dates, and the basic information-return duties. The SEE opens Part 2 with these rules because every later question depends on knowing what kind of taxpayer the business is.
Partnership taxation from formation to termination: contributions of property and services, inside and outside basis, the effect of liabilities, guaranteed payments, distributions, sales of an interest, related-party rules, family partnerships and the centralized audit regime. Outside basis computations are among the most common Part 2 calculation items.
The life cycle of a C corporation: tax-free formation under section 351, the flat 21% rate, special deductions, earnings and profits, dividends and redemptions, liquidations, penalty taxes, controlled groups and Form 1120 compliance. The SEE favors short computations of boot, the dividends-received deduction, the charitable limit and dividend amounts.
How a corporation becomes, operates as and stops being an S corporation: the Form 2553 election and consents, separately stated items, shareholder stock and debt basis, distributions through the accumulated adjustments account, the built-in gains tax, shareholder-employee rules and termination. Basis ordering and distribution ordering are the computations the SEE uses most.
Which business costs are deductible, when and how much: meals, gifts, vehicles, home office, interest under section 163(j), bad debts, prepaid and small-dollar items, inventory, fringe benefits and start-up costs. The SEE tests the dollar limits and the many expenses that look deductible but are not.
Cost recovery for business property in 2025, including the section 179 and bonus depreciation changes made by the One Big Beautiful Bill Act, MACRS classes and conventions, listed property and auto limits, amortization, repair rules, and what happens on sale: sections 1245, 1250 and 1231, involuntary conversions and like-kind exchanges. Expect several table-based computations.
An employer's payroll duties for 2025: FICA and FUTA, deposit schedules, Forms 941, 944 and 940, supplemental wage and backup withholding, worker classification and section 530 relief, accountable plans, information returns and record keeping. The SEE tests deposit rules, due dates and short FICA or FUTA computations.
The section 199A deduction above the threshold, general business credits, research expenditures after the One Big Beautiful Bill Act, excess business losses and NOLs, accounting methods and Form 3115, book-tax reconciliation on Schedules M-1 and M-2, related-party timing rules and choice-of-entity planning. The SEE pairs recall of 2025 thresholds with one or two worked limits.
Income taxation of estates and trusts: simple, complex and grantor trusts, exemptions, distributable net income and the distribution deduction, the 65-day election, compressed 2025 brackets, the net investment income tax, deductions unique to fiduciaries and Form 1041 filing. The SEE combines definitions with short DNI and tax computations.
Two specialized areas: tax-exempt organizations (applying for and keeping 501(c) status, the Form 990 series and unrelated business income) and employer retirement plans (SEP, SIMPLE and 401(k) limits for 2025, highly compensated employees, prohibited transactions and plan reporting). The SEE tests thresholds and due dates in both.
The special rules for farmers (where to report sales, livestock holding periods, weather-related sales, crop insurance, income averaging, farm depreciation and estimated tax) and for business-level rental real estate (residential versus nonresidential buildings, mixed-use property and real estate professionals). The SEE tests which form or schedule applies and the timing elections farmers can make.
What counts as practice before the IRS, who may practice and how far, how an enrolled agent becomes and stays enrolled (Form 23, renewal cycles, continuing education, PTINs), and the limited practice and AFSP rules. Part 3 opens with these Circular 230 basics, and the SEE tests them with exact numbers: 72 hours, 16 hours, 60 days, 30 days.
The duties Circular 230 places on practitioners in Subpart B (information to the IRS, client omissions, due diligence, records, fees, conflicts, advertising, refund checks, return positions, written advice, supervision and competence) and the sanctions in Subparts C and D. These sections are tested by number and by short scenarios, so knowing what each section requires and what it does not is the key skill.
The Internal Revenue Code penalties and record rules that apply to paid preparers (sections 6694, 6695, 6107, 6060, 7216 and the due diligence rules for refundable credits and head of household) and the taxpayer penalties a preparer must explain: accuracy-related, fraud and frivolous return penalties. Amounts for returns filed in 2026 come from Rev. Proc. 2024-40.
How a taxpayer authorizes someone to deal with the IRS: Form 2848 for representation, Form 8821 for information only, and the lighter tools of oral consent and the third-party designee. The note covers what each authorizes, who signs, signing deadlines, the CAF, revocation and withdrawal, durable powers and signing returns for a taxpayer. Most SEE items cite the Form 2848 instructions (Rev. 9-2021).
The tools a representative uses to build a client's case: the hierarchy of tax authority, the statutes of limitations for assessment, refund and collection, the timely mailing rule, post-filing notices, the Taxpayer Advocate, identity theft procedures, financial analysis and the line between avoidance and evasion. Deadline arithmetic is the core skill.
What happens after tax is assessed and unpaid: liens and levies, Collection Due Process and the Collection Appeals Program, installment agreements, offers in compromise, currently not collectible status, the trust fund recovery penalty, passport certification and related refund and payment forms. The SEE tests deadlines, dollar thresholds and which remedy fits a client's facts.
How an examination runs and ends, the taxpayer's interview rights and the practitioner privilege, the burden of proof, the path from the 30-day letter through Appeals to the Tax Court, and the ways to remove penalties and interest: reasonable cause, first-time abatement, erroneous IRS advice and interest abatement. Expect deadline recall and failure-to-file computations.
How returns reach the IRS through authorized e-file providers: the preparer e-file mandate and Form 8948, the e-file application and EFIN, ERO duties, signature methods and Forms 8879 and 8453, rejected returns, infraction levels and sanctions, advertising rules, record retention and data security under the FTC Safeguards Rule. The sources are Pub. 1345 (Rev. 12-2025) and Pub. 3112 (Rev. 11-2025).
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