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Published: September 22, 2026>Board360
EA Part 1 covers US individual income taxation in full. For Indian candidates, it is the most content-dense section of the Special Enrollment Examination. The US individual tax system has no direct Indian equivalent, so almost everything here is new learning. The good news: the PSI Candidate Information Bulletin publishes the complete Examination Content Outline, including every domain, every subtopic, and the exact number of scored questions per domain. Nothing is hidden. This guide takes the official content outline, adds the preparation context Indian candidates need, and builds it into a plan that works from a standing start.
The question counts below come directly from the PSI Candidate Information Bulletin, revised August 28, 2026. These are the only current official figures. Sources citing different counts or percentages are using outdated data from the Prometric era.
| Domain | Scored Questions | % of 85 Scored Questions |
|---|---|---|
| 1. Preliminary Work with Taxpayer Data | 14 | 16.5% |
| 2. Income and Assets | 17 | 20% |
| 3. Deductions and Credits | 17 | 20% |
| 4. Taxation | 15 | 17.6% |
| 5. Advising the Individual Taxpayer | 11 | 12.9% |
| 6. Specialized Returns for Individuals | 11 | 12.9% |
| TOTAL | 85 | 100% |
Domains 2 and 3 are the highest-priority study areas, together accounting for 40% of your scored questions. Domains 4 and 1 follow at 17.6% and 16.5%. Domains 5 and 6 each carry 12.9% and should be studied after you have covered the higher-weight domains thoroughly.
The 15 unscored experimental questions are distributed randomly throughout the exam and will not be identified. You cannot know which questions are experimental, so treat all 100 as scored.
Domain 1 covers everything a tax practitioner does before calculating the first dollar of tax. The IRS holds preparers responsible for due diligence failures even when the error originated with the client. This domain tests whether you can identify the right filing status, verify dependency claims, and spot foreign reporting obligations before opening the return.
The five US filing statuses — Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Surviving Spouse — have specific eligibility rules and meaningfully different tax rates. Head of Household is the most frequently tested status. Its eligibility conditions are detailed: the taxpayer must be unmarried (or considered unmarried), must have paid more than half the cost of keeping up a home, and must have a qualifying person living in the home for more than half the year. Do not confuse it with Single.
The qualifying child test and the qualifying relative test are separate frameworks with different rules. The qualifying child test requires relationship, age, residency, and support conditions. The qualifying relative test uses a gross income test and a support test instead of age. Tie-breaker rules — which taxpayer claims the child when more than one is eligible — are heavily tested.
A US citizen, a resident alien, and a non-resident alien are taxed differently. The Substantial Presence Test determines resident alien status for those without a green card: 31 days in the current year and 183 days counted across three years (100% current year, 1/3 prior year, 1/6 year before that). ITIN requirements and the difference in tax treatment for non-resident aliens (Form 1040-NR versus Form 1040) are testable.
FBAR (FinCEN Form 114) and Form 8938 both appear in Domain 1 and in Domain 6. In Domain 1, the focus is on identifying when these obligations exist during the intake process. Know the $10,000 aggregate threshold for FBAR, the filing deadline (April 15, automatic extension to October 15), and the fact that FBAR is filed with FinCEN — not with the IRS. Penalties for failure to file are up to $10,000 per non-willful violation.
The Affordable Care Act's premium tax credit (Form 8962, reconciled against Form 1095-A) is testable. Know household income calculation, the applicable percentage table, and how advance premium tax credit payments are reconciled at filing time. Clients who received more advance credit than they were entitled to must repay the excess, subject to repayment caps based on income. Domain 1 is primarily definitional and procedural. Budget 10 to 12 study hours here, with emphasis on filing status, dependency, and foreign account reporting obligations.
Domain 2 is the largest domain by question count and covers the widest content range. Every major income type in US individual taxation is here, alongside the property transactions that generate capital gains and losses. Wages, Interest, Dividends
W-2 wages are the baseline. Know which employer-provided benefits are excluded from income (employer health insurance, HSA contributions within limits) and which are taxable (personal use of a company car, employer-provided meals beyond the de minimis amount). Tax-exempt interest from municipal bonds is included in income for AMT and ACA purposes even though it is excluded from regular taxable income. Qualified dividends receive preferential long-term capital gain rates; ordinary dividends do not. The holding period for qualified dividend treatment is 60 days during the 121-day period around the ex-dividend date.
Short-term capital gains (assets held one year or less) are taxed as ordinary income. Long-term capital gains (held more than one year) receive preferential rates of 0%, 15%, or 20% depending on taxable income. The netting rules — combining short-term and long-term gains and losses across multiple transactions — are complex and heavily tested. Net capital losses are limited to $3,000 per year against ordinary income; unused losses carry forward indefinitely. Virtual currency (cryptocurrency) is treated as property, not currency, so every disposal — sale, exchange, or payment — is a capital event.
This is one of the most tested areas in Domain 2. Traditional IRA distributions are taxable to the extent of pre-tax contributions. Roth IRA qualified distributions are tax-free. Form 8606 tracks non-deductible (after-tax) IRA contributions and basis to prevent double taxation. Know the rollover rules: direct trustee-to-trustee transfers are not taxable events; indirect rollovers must be completed within 60 days and are subject to 20% withholding on employer plan distributions. Required minimum distributions begin April 1 of the year after the taxpayer turns 73 (SECURE 2.0 Act for those born after 1950).
Between 0% and 85% of Social Security benefits may be taxable depending on combined income. Combined income is AGI plus tax-exempt interest plus 50% of Social Security benefits. The thresholds differ by filing status. For single filers, benefits become partially taxable at $25,000 combined income and up to 85% taxable at $34,000. Know the thresholds for MFJ ($32,000 and $44,000). This calculation appears regularly on Part 1.
Passive activity losses from rental properties and limited partnership interests cannot be deducted against active or portfolio income. The $25,000 passive loss allowance for rental real estate requires active participation and phases out between $100,000 and $150,000 of MAGI. Real estate professionals who spend 750+ hours annually in real property activities (and more than half their working hours) are exempt from passive rules for rental activities. Pass-through income from partnerships and S corporations flows through Schedule K-1; the taxpayer's basis limits how much loss can be deducted.
US citizens and resident aliens are taxed on worldwide income. Foreign earned income may be excluded under IRC Section 911 (Form 2555) if the taxpayer meets the bona fide residence or physical presence test. The foreign tax credit (Form 1116) provides a dollar-for-dollar credit for foreign taxes paid on income that was not excluded. You cannot apply both the exclusion and the credit to the same income. This interaction is a standard exam topic.
Basis is the foundation of every capital gain calculation. Cost basis applies to purchased assets. Carryover basis applies to gifted assets (with a special adjustment rule when FMV exceeds basis at date of gift and gift tax was paid). Stepped-up basis applies to inherited assets — the basis resets to FMV at date of death, eliminating pre-death appreciation. Know Section 121 exclusion for primary residence sales ($250,000 single, $500,000 MFJ), Section 1031 like-kind exchange deferral (real property only, post-TCJA), and the installment sale gross profit percentage calculation.
Domain 2 has the most subtopics and requires both conceptual understanding and calculation practice. Budget 20 to 25 study hours. Retirement income rules and capital gains netting require the most repetition through practice questions.
Domain 3 covers adjustments to gross income, itemized deductions, the qualified business income (QBI) deduction, and the major individual tax credits. It is split roughly between definitional knowledge (eligibility rules, thresholds) and calculation ability (credit formulas, phase-out mechanics).
These are deductible whether or not the taxpayer itemizes. Self-employed taxpayers deduct 50% of self-employment tax as an adjustment. Traditional IRA contribution deductibility phases out based on MAGI when the taxpayer or spouse participates in a workplace retirement plan — know the phase-out ranges by filing status. HSA contributions are deductible up to annual limits ($4,300 self-only, $8,550 family for 2025, with a $1,000 catch-up for those 55 and older). Student loan interest is deductible up to $2,500, subject to MAGI phase-out.
Medical expenses are deductible above 7.5% of AGI. The SALT (state and local tax) deduction is capped at $10,000 for all filers. Mortgage interest is deductible on acquisition debt up to $750,000 ($375,000 MFS) for loans originated after December 15, 2017. Charitable contribution limits vary: 60% of AGI for cash donations to public charities, 30% for appreciated capital gain property. Non-cash contributions over $500 require Form 8283; contributions of property valued over $5,000 (other than publicly traded securities) require a qualified appraisal. After the Tax Cuts and Jobs Act, personal casualty and theft losses are only deductible if they occur in a federally declared disaster area.
The child tax credit is $2,000 per qualifying child under 17, phasing out at $200,000 ($400,000 MFJ). Up to $1,700 is refundable as the Additional Child Tax Credit. The American Opportunity Tax Credit (AOTC) provides up to $2,500 per student for the first four years of higher education; 40% is refundable. The Lifetime Learning Credit provides up to $2,000 per return for any year of postsecondary education. You cannot claim both for the same student in the same year.
The Earned Income Tax Credit (EITC) is heavily tested because preparers face due diligence requirements. Know the eligibility rules: earned income requirement, investment income cap, AGI phase-out thresholds by filing status and number of qualifying children, and age requirements for childless filers (25 to 64). The preparer's Form 8867 due diligence checklist and the consequences of EITC due diligence failures are testable from the enrolled agent's perspective.
Budget 18 to 22 study hours for Domain 3. Give equal attention to itemized deduction thresholds and credit eligibility rules. Do not underestimate the EITC section — the due diligence angle adds a practitioner layer that requires separate preparation.
Domain 4 covers special taxes that sit alongside regular income tax. Many of these topics are rarely encountered in simple individual returns but appear regularly on the EA exam because they test competence with more complex taxpayer situations.
The AMT is a parallel tax system designed to ensure high-income taxpayers pay a minimum tax. To calculate AMT liability, start with regular taxable income, add back AMT preferences and adjustments (including the standard deduction, state and local taxes, and accelerated depreciation), and subtract the AMT exemption. The result is taxed at 26% up to the AMT threshold and 28% above it. If AMT exceeds regular tax, the difference is the additional tax owed. The AMT credit (Form 8801) allows recovery of AMT paid in prior years when regular tax exceeds AMT in a later year.
Self-employed individuals pay both the employer and employee portions of Social Security and Medicare taxes — a combined 15.3% (12.4% Social Security on income up to the wage base, 2.9% Medicare on all net SE income). The calculation: multiply net SE income by 92.35% to get the SE income subject to SE tax, then apply the 15.3% rate. The 0.9% Additional Medicare Tax applies on SE income above $200,000 (single) or $250,000 (MFJ). Half of SE tax is deductible as an adjustment to gross income.
The 3.8% Net Investment Income Tax (NIIT) applies to the lesser of net investment income (NII) or the excess of MAGI over the threshold ($200,000 single, $250,000 MFJ). NII includes dividends, interest, capital gains, passive activity income, and rental income outside the course of a trade or business. Wages, self-employment income, and Social Security are not NII. The 0.9% Additional Medicare Tax applies to wages and SE income above the same thresholds — separate from the NIIT and applying to earned income rather than investment income.
Taxpayers with insufficient withholding may owe an underpayment penalty. Safe harbors: pay 90% of the current year's tax liability, or 100% of the prior year's tax liability (110% if prior year AGI exceeded $150,000). Form 2210 calculates the penalty. Know the exceptions that waive the penalty: the first year of retirement, a disability, or casualty and unusual circumstances. Advising clients on mid-year estimated tax adjustments is a practical skill tested in both Domain 4 and Domain 5.
When a taxpayer pays cash wages of $2,700 or more to a household employee (the 2025 threshold), they have employment tax obligations. Schedule H is filed with the 1040. The employer must withhold and remit Social Security and Medicare taxes and may owe FUTA. This is called the nanny tax and is a standard Domain 4 topic. Know the threshold, the forms involved, and that the obligation attaches to the employer — the taxpayer, not the household employee's own return.
Domain 4 is calculation-intensive. AMT, SE tax, NIIT, and estimated tax calculations all require practice with actual numbers. Budget 15 to 18 study hours. Work through calculation problems from the IRS sample questions and your review course's question bank. These taxes have no Indian equivalent, so prior exposure to Indian tax practice does not transfer here.
Domain 5 shifts from return preparation to tax planning. The IRS tests whether enrolled agents can advise clients on decisions with tax implications — not just report past transactions correctly. Questions present a client situation and ask what the practitioner should recommend.
When should a client convert a traditional IRA to a Roth? Convert when the current marginal tax rate is lower than the expected future rate, or when the conversion tax can be paid from outside the IRA. Required minimum distributions begin April 1 of the year after the taxpayer turns 73 (under SECURE 2.0 for those born after 1950). Qualified charitable distributions (QCDs) allow taxpayers 70.5 and older to transfer up to $105,000 annually from an IRA directly to a qualified charity. QCDs satisfy RMD requirements and are excluded from income — an advantage over deducting the same amount as a charitable contribution.
Gifts versus inheritances: gifted assets retain the donor's carryover basis; inherited assets receive a basis step-up to FMV at date of death. The gift tax annual exclusion is $18,000 per donee per year (2025). The unified credit offsets both gift and estate tax against the basic exclusion amount ($13.99 million for 2025). Portability allows a surviving spouse to use the deceased spouse's unused exclusion amount (DSUE), but the executor must elect portability by filing Form 706 within nine months of death, even when no estate tax is owed.
Section 529 plans offer tax-free growth and tax-free distributions for qualified education expenses. Contributions are not federally deductible but some states offer deductions. Post-SECURE 2.0, unused 529 funds can be rolled over to a Roth IRA for the same beneficiary after 15 years (subject to annual limits and a $35,000 lifetime cap). Know the interaction between 529 distributions and education credits: you cannot claim the AOTC on the same expenses covered by a tax-free 529 distribution.
For divorce agreements executed after December 31, 2018, alimony is not deductible by the payor and not includable as income by the recipient. This is the opposite of the pre-TCJA rule and a frequent source of exam errors. Community property rules apply in nine states; spouses in those states must each report half of community income and deductions. Injured spouse (Form 8379) and innocent spouse (Form 8857) relief are distinct remedies with different eligibility requirements . Budget 10 to 12 study hours for Domain 5. Study by life-event scenario: client retiring early, getting divorced, receiving an inheritance, saving for a child's education. Know the tax optimization strategies around each.
Domain 6 covers three specific return types: estate tax, gift tax, and international information reporting. These are less common in routine tax practice but require specialist knowledge. Indian EA candidates often encounter the international reporting topics when working with NRI clients.
The gross estate includes the FMV of all property owned by the decedent at death: real property, bank accounts, investments, retirement accounts (unless rolled over by a surviving spouse), life insurance where the decedent held any incidents of ownership, and interests in trusts and partnerships. Jointly held property with a spouse is included at 50%. Jointly held property with others is included at the proportion the decedent contributed.
The unlimited marital deduction allows all property passing to a surviving US citizen spouse to pass free of estate tax, regardless of amount. The portability election lets the surviving spouse use the deceased spouse's unused exclusion amount (DSUE). To elect portability, the executor must file Form 706 within nine months of death, even when no estate tax is owed.
The annual exclusion is $18,000 per donee per year (2025). Gifts below this amount do not require Form 709. Gift splitting allows married couples to treat a gift as made half by each spouse, effectively doubling the exclusion to $36,000 per donee. Both spouses must elect gift splitting on Form 709 even if only one made the actual gift. Taxable gifts made during life reduce the available unified credit at death — the gift and estate tax systems are unified through the same exemption amount.
Both FBAR and Form 8938 address foreign financial reporting, but they are different instruments with different thresholds, different filers, and different jurisdictions. This distinction is explicitly named in the official content outline for Domain 6 and appears on the exam.
| Feature | FBAR (FinCEN Form 114) | Form 8938 (FATCA) |
|---|---|---|
| Filed with | FinCEN (not the IRS) | IRS (with Form 1040) |
| Trigger threshold | Aggregate $10,000 in foreign accounts at any point during the year | $50,000 at year-end or $75,000 at any point (single, US-based). Higher thresholds for MFJ and those abroad |
| What it covers | Foreign financial accounts only (bank, securities, pension) | Specified foreign financial assets: accounts PLUS foreign stock, securities, interests in foreign entities not held through an account |
| Filing deadline | April 15; automatic extension to October 15 | With the taxpayer's Form 1040 (including extensions) |
| Non-willful failure penalty | Up to $10,000 per violation | $10,000, plus $50,000 maximum if not filed after IRS notice |
A taxpayer may be required to file both. The two forms can cover the same foreign account — filing one does not eliminate the obligation to file the other. This overlap is a direct exam topic.
Budget 12 to 15 study hours for Domain 6. The estate and gift tax sections require understanding a multi-step calculation involving annual exclusions, unified credits, and portability elections. The FBAR versus Form 8938 distinction is worth dedicated study time, particularly for candidates who plan to work with NRI clients.
Indian candidates without prior US tax experience typically need 80 to 120 study hours to be ready for Part 1. The plan below allocates time by domain weight and complexity.
| Phase | Weeks | Focus | Hours |
|---|---|---|---|
| 1: Foundation | 1–2 | Domain 1 (Preliminary Work) + Domain 5 (Advising). Filing status, dependency, residency, FBAR intro, and life-event planning. | 20–22 |
| 2: Core Income | 3–5 | Domain 2, Part A — wages, interest, dividends, capital gains, retirement income, Social Security. | 20–22 |
| 3: Deductions and Credits | 5–7 | Domain 3 — adjustments, itemized deductions, child tax credit, AOTC, EITC due diligence. | 18–22 |
| 4: Property and Foreign | 7–8 | Domain 2, Part B — passive income, pass-through (K-1), foreign income, property transactions, like-kind exchanges. | 14–16 |
| 5: Special Taxes and Returns | 9–11 | Domain 4 (AMT, SE tax, NIIT, estimated tax) and Domain 6 (estate, gift tax, FBAR vs. Form 8938). | 26–30 |
| 6: Full Practice Exams | 11–12 | Full 100-question timed mock exams. Identify weak domains from results. Targeted review. | 20–24 |
| TOTAL | 12 weeks | All six domains | 118–136 hours |
Two rules that matter more than hours logged: complete practice questions under timed conditions from week one, and review every wrong answer immediately. Understanding why you got a question wrong teaches more than reading another chapter.
The official IRS sample test questions for Part 1 are available on the IRS website and are worth completing early to calibrate the question style before investing in a full review course.
Board360 offers a structured EA program powered by HOCK International, an IRS-approved EA content provider. The program covers all three SEE parts, with dedicated Part 1 material on individual taxation built for candidates who are new to the US tax system. Book a free demo session at the Board360 EA program page to see how the curriculum maps against the six Part 1 domains and what the study schedule looks like for Indian working professionals.