QBI, Credits, NOLs and Other Business Taxes
This topic covers qualified business income, specified service trades or businesses, UBIA, phaseouts, general business credits, disabled access credit, research credit, small business health care credit, foreign tax credit, net operating losses, home office, excise and other taxes.
How to study for EA Part 2
Build every answer around entity classification, filing obligation, owner basis, income and deduction character, payroll duties, accounting records, and specialized taxpayer rules.
Core concepts
Concept 1
QBI, Credits, NOLs and Other Business Taxes questions test whether an enrolled agent candidate can apply business tax rules to entity, return, owner, and recordkeeping facts.
Exam cue: Identify the entity, tax year, owner role, form, accounting method, record source, and whether the issue is income, deduction, credit, basis, payroll, or advice.
Concept 2
The best answer usually identifies the business form, tax year, filing obligation, income or deduction character, owner-level consequence, and penalty exposure before calculating.
Exam cue: Check basis, distributions, depreciation, employment tax deposits, QBI limits, method changes, due dates, penalties, and information reporting.
Concept 3
Eliminate answers that ignore entity classification, basis, payroll deposits, accounting method, book-tax reconciliation, or specialized taxpayer filing requirements.
Exam cue: Tie the result to the correct business return, schedule, K-1, payroll form, book-tax reconciliation, owner basis, or specialized taxpayer return.
Risk pitfalls and guardrails
Solving as if every business were a sole proprietorship instead of respecting entity classification and owner-level rules.
Guardrail: Use a 15-second safety pause before finalizing your action.
Calculating a deduction or credit without checking basis, at-risk limits, passive limits, depreciation elections, or payroll compliance.
Guardrail: Use a 15-second safety pause before finalizing your action.
Missing specialized taxpayers such as trusts, estates, exempt organizations, retirement plans, farmers, and rental real estate.
Guardrail: Use a 15-second safety pause before finalizing your action.
Memory anchors
QBI Deduction
The qualified business income deduction can reduce taxable income from eligible pass-through business income.
SSTB
A specified service trade or business can face QBI limitations at higher taxable income levels.
UBIA
Unadjusted basis immediately after acquisition can affect certain QBI limitation calculations.
General Business Credit
General business credits are subject to ordering, limitation, and carryover rules.
Disabled Access Credit
The disabled access credit can help eligible small businesses with accessibility costs.
Research Credit
The research credit may apply to qualified research expenses when requirements are met.
Small Business Health Credit
The small business health care tax credit depends on employer size, wages, premiums, and coverage.
Net Operating Loss
A net operating loss may be carried according to current statutory rules and limitations.
Home Office
Home office deductions require exclusive and regular business use under applicable rules.
Excise Tax
Excise tax applies to specific transactions, goods, activities, or industries under statutory rules.
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
Which taxpayer may generally claim a section 199A qualified business income deduction?
A sole proprietor has $80,000 of qualified business income and enough taxable income, with no threshold limitations or capital-gain constraint. What is the tentative QBI component?
Answer all questions to submit.
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Move forward only after this module is stable.
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