Source Documents and Prior Returns
This topic covers Forms W-2, 1099, 1098, 1095, K-1, prior-year returns, carryovers, amended returns, preparer review, taxpayer interviews, and information reporting.
How to study for EA Part 1
Build every answer around taxpayer data, filing status, income category, deduction or credit eligibility, forms, limitations, and reporting consequences.
Core concepts
Concept 1
Source Documents and Prior Returns questions test whether an enrolled agent candidate can apply individual income tax rules to Form 1040 fact patterns for the tested tax year.
Exam cue: Identify taxpayer, filing status, dependency, tax year, source document, form, and whether the issue is income, deduction, credit, tax, advice, or specialized return.
Concept 2
The best answer usually identifies filing status, taxpayer data, income category, deduction or credit rule, limitation, reporting form, and penalty consequence before calculating.
Exam cue: Check thresholds, phaseouts, basis, holding period, substantiation, due dates, and whether the item is refundable, nonrefundable, taxable, excluded, or deferred.
Concept 3
Eliminate answers that ignore documentation, mix refundable and nonrefundable credits, skip basis, overlook special filing statuses, or use a prior-year rule when current-year facts control.
Exam cue: Tie the result to Form 1040 reporting, schedules, information returns, estimated tax, penalty relief, or future-year planning.
Risk pitfalls and guardrails
Calculating before deciding whether the taxpayer is eligible for the status, deduction, credit, exclusion, or reporting exception.
Guardrail: Use a 15-second safety pause before finalizing your action.
Using general tax intuition instead of the IRS outline's specific individual-return categories.
Guardrail: Use a 15-second safety pause before finalizing your action.
Missing forms, due dates, carryovers, international reporting, estate and gift filing, or spouse relief consequences.
Guardrail: Use a 15-second safety pause before finalizing your action.
Memory anchors
Form W-2
Form W-2 reports wages, withholding, and employment tax information.
Form 1099
Form 1099 reports many types of nonwage income such as interest, dividends, retirement, or nonemployee compensation.
Schedule K-1
Schedule K-1 reports pass-through items from partnerships, S corporations, estates, or trusts.
Form 1098
Form 1098 reports mortgage interest, tuition, or other specified information depending on form type.
Prior Return
A prior return can reveal carryovers, basis, depreciation, elections, and recurring reporting issues.
Carryover
A carryover moves unused tax attributes to another year when allowed.
Amended Return
An amended return corrects a previously filed return when a change is needed.
Taxpayer Interview
A taxpayer interview gathers facts that documents alone may not show.
Preparer Review
Preparer review checks completeness, reasonableness, signatures, attachments, and due diligence items.
Information Return
An information return reports payments or transactions to the IRS and the taxpayer.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A taxpayer's Form W-2 reports $8,000 more wages than the final pay statement. What should the taxpayer generally do before using a substitute wage statement?
An employer has not provided a Form W-2 by the required time, and the taxpayer has contacted both the employer and the IRS without obtaining it. Which form may be used to estimate the missing wage information?
Answer all questions to submit.
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Continue learning
Move forward only after this module is stable.
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