EA Exam Part 1 Study Guide: Individuals (2026)

Part 1 Overview: The Individual Taxpayer

The Special Enrollment Examination (SEE) Part 1 focuses on the taxation of individuals. While many candidates assume this is the easiest of the three parts because they are familiar with their own tax returns, the statistics tell a different story. For the 2024-2025 testing cycle, Part 1 had a pass rate of 58%, which was the lowest of all three exam parts.

The difficulty lies in the breadth of topics. You aren't just being tested on a standard Form 1040; you are being tested on the edge cases of dependency rules, the complexities of the Qualified Business Income (QBI) deduction, the nuances of foreign financial reporting, and the permanent changes introduced by the One Big Beautiful Bill Act (OBBBA) of 2025.

Exam Format and Weighting

The exam consists of 100 multiple-choice questions. Of these, 85 are scored and 15 are experimental (unscored) questions used for future exam development. You have 3.5 hours to complete the test.

Domain 1: Preliminary Work and Taxpayer Data (20%)

This domain covers the intake process and the fundamental building blocks of a tax return. You must understand how to determine a taxpayer's filing status and whether they can claim dependents.

Key Topics to Master:

• Filing Status: Single, Married Filing Jointly (MFJ), Married Filing Separately (MFS), Head of Household (HoH), and Qualifying Surviving Spouse (QSS). Pay close attention to the "abandoned spouse" rule for HoH.
• Dependency Tests: Qualifying Child (Relationship, Age, Residency, Support, Joint Return) and Qualifying Relative (Not a QC, Member of Household/Relationship, Gross Income, Support).
• Tiebreaker Rules: What happens when two people can claim the same child? (Parent vs. Non-parent, Parent with longer residency, Parent with higher AGI).
• Due Dates and Extensions: April 15th (or the next business day), October 15th extensions, and the special rules for taxpayers living abroad.
• Estimated Taxes: Safe harbor rules (90% of current year or 100%/110% of prior year tax).

Domain 2: Income and Assets (20%)

Domain 2 focuses on what constitutes taxable income and how to calculate the basis of assets. This is where the OBBBA changes start to appear in force.

Key Topics to Master:

• Wages and Fringe Benefits: Taxable vs. nontaxable benefits (e.g., health insurance vs. personal use of a company car).
• Investment Income: Ordinary vs. qualified dividends, taxable vs. tax-exempt interest (Private Activity Bonds).
• Retirement Income: Traditional vs. Roth IRA distributions, RMD rules (starting at age 73/75), and Social Security taxability (50% or 85% thresholds).
• Capital Gains and Losses: Short-term vs. long-term, the $3,000 annual loss limit, and the Section 121 home sale exclusion ($250k/$500k).
• Virtual Currency: Reporting requirements for digital assets and how to calculate gain/loss on trades.

Domain 3: Deductions and Credits (20%)

This is often the most calculation-heavy part of the exam. You must know the difference between "above-the-line" adjustments to income and "below-the-line" itemized deductions.

Key Topics to Master:

• Standard Deduction: For 2026, these are $16,100 (Single) and $32,200 (MFJ). These are now permanent.
• SALT Cap: The State and Local Tax deduction cap has been raised to $40,000 for 2025-2029.
• Charitable Contributions: Non-itemizers can now deduct up to $1,000 ($2,000 MFJ). Itemizers face a new 0.5% AGI floor.
• Child Tax Credit (CTC): Permanently increased to $2,200 per child, with a refundable portion (ACTC) of $1,700.
• QBI Deduction (Section 199A): The 20% deduction for pass-through income is now permanent. Know the SSTB rules and phase-out ranges ($203,000 Single / $406,000 MFJ for 2026).

Domain 4: Taxation (17%)

Domain 4 covers the actual calculation of tax liability, including the Alternative Minimum Tax (AMT) and self-employment taxes.

Key Topics to Master:

• Tax Brackets: The seven-rate structure (10% to 37%) is now permanent.
• AMT: The exemption amounts are permanently higher ($90,100 Single / $140,200 MFJ). Know the common preference items like private activity bond interest.
• Self-Employment Tax: 15.3% total (12.4% Social Security up to the wage base, 2.9% Medicare). Remember the 7.65% deduction for the employer-equivalent portion.
• Net Investment Income Tax (NIIT): 3.8% tax on the lesser of net investment income or the excess of MAGI over thresholds ($200k/$250k).

Domain 5: Advising the Individual Taxpayer (13%)

This domain tests your ability to look forward and provide planning advice based on a taxpayer's life events. It is less about the "what" and more about the "how" and "why" of tax strategy.

Key Topics to Master:

• Education Savings: 529 plans (now with $20,000 K-12 limit) and Coverdell ESAs. Know the rules for 529-to-Roth IRA rollovers (up to $35,000 lifetime).
• Retirement Planning: Choosing between Traditional and Roth accounts based on current vs. future tax rates. Understand the impact of the SECURE Act 2.0 on RMDs and catch-up contributions.
• Life Events: How marriage, divorce, birth of a child, or death of a spouse changes the tax picture. For example, the "widow's penalty" and the importance of the QSS filing status.
• Trump Accounts: A new program for children born between 2024 and 2028. Know the $1,000 federal seed, the $5,000 annual contribution limit, and the qualified purposes (education, home purchase, starting a business).

Domain 6: Specialized Returns for Individuals (14%)

The final domain covers "everything else," including estate and gift taxes and international reporting. These topics are often the most intimidating for candidates who do not work in these niche areas.

Key Topics to Master:

• Estate Tax: The exemption is now $15 million per person ($30 million MFJ) and is permanent. Understand the concept of "portability" (Form 706) and the step-up in basis.
• Gift Tax: The annual exclusion is $19,000 for 2026. Know when a Form 709 is required and how the unified credit works.
• FBAR and FATCA: Reporting foreign bank accounts (FinCEN 114) and foreign financial assets (Form 8938). Know the $10,000 and $50,000 thresholds and the penalties for non-compliance.
• Nonresident Aliens: Filing Form 1040-NR and the difference between effectively connected income (ECI) and FDAP income (taxed at a flat 30% unless a treaty applies).
• ABLE Accounts: Onset of disability eligibility has expanded to age 46. Know the contribution limits and the Saver's Credit eligibility.

OBBBA Changes: What You Must Memorize

The 2026 exam window is the first to fully integrate the One Big Beautiful Bill Act. You cannot rely on old study materials. Here are the critical numbers to memorize:

• Standard Deduction: $16,100 (Single) / $32,200 (MFJ).
• SALT Cap: $40,000 (up from $10,000).
• Child Tax Credit: $2,200 (up from $2,000).
• Estate Exemption: $15,000,000 (up from ~$13.6M).
• New Deductions: Tips ($25k), Overtime ($12.5k/$25k), Senior Bonus ($6k), Auto Loan Interest ($10k).
• Terminated Credits: EV credits (Sec 30D) and Residential Energy credits (Sec 25C/25D) are no longer available for 2026.

Part 1 Study Strategy

To pass Part 1 on your first attempt, follow this three-step approach:

1. Master the Dependency Rules

Dependency questions are the "bread and butter" of Domain 1. You should be able to run through the QC and QR tests in your head for any scenario. If a question mentions a "cousin" or a "foster child," you should immediately know which test applies.

2. Drill the QBI Calculation

Section 199A is no longer a "new" topic, but it remains one of the most complex. Practice calculating the deduction for both below-threshold and above-threshold taxpayers. Know the list of Specified Service Trades or Businesses (SSTBs) by heart.

3. Use Spaced Repetition for Thresholds

There are too many phase-out ranges to memorize through brute force. Use a tool like Enrolled Angel that uses spaced repetition to quiz you on these numbers (e.g., the EITC maximums, the AMT exemptions, and the new OBBBA deduction caps) until they become second nature.

For more in-depth guides on the other parts of the exam, check out our Part 2 Business Study Guide and our Part 3 Representation Study Guide. You can also read more about the 2026 OBBBA Tax Law Changes or try our Free EA Exam Practice Questions.