Enrolled Agent Exam [Part 2] 33, Form 7004 — Business Tax Extensions

Enrolled Agent Exam [Part 2] 70, Disabled Access Credit and FICA Tip Credit

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The Disabled Access Credit is for small businesses with under $1 million in prior-year receipts OR 30 or fewer full-time employees. - How to calculate the Disabled Access Credit as 50% of eligible expenditures between $250 and $10,250, for a maximum credit of $5,000. - The FICA Tip Credit is for food and beverage employers for their share of FICA taxes paid on certain employee tips. - An exam trap for the FICA Tip Credit is to use the statutory $5.15 per hour rate in calculations, not the current federal minimum wage. - Employers claiming the FICA Tip Credit cannot also deduct the portion of FICA taxes that generated the credit. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 69, Work Opportunity Tax Credit (WOTC)

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The WOTC is a general business credit for hiring individuals from specific targeted groups who face employment barriers. - The credit is calculated as either 25% (for 120-399 hours worked) or 40% (for 400+ hours worked) of qualified first-year wages. - Qualified wages are generally capped at the first $6,000 of earnings, resulting in a maximum credit of $2,400 per employee for most groups. - Employers MUST file Form 8850 with their state workforce agency within 28 days of the employee's start date to be eligible for the credit. - A critical exam trap: The employer's deduction for salaries and wages must be reduced by the amount of the WOTC claimed. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 68, Research and Development Credit (§41)

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - Post-2021, §174 R&D costs must be capitalized and amortized over 5 years for domestic research or 15 years for foreign research. - The §41 credit is calculated on Qualified Research Expenses (QREs), such as wages and supplies, but excludes costs like research after commercial production begins. - Claiming the R&D credit requires you to reduce your otherwise allowable deduction for those same research expenses by the amount of the credit. - A Qualified Small Business may elect to use the R&D credit to offset payroll taxes. - To be a Qualified Small Business for the payroll tax offset, the business must have less than $5 million in gross receipts and be in its first five years of having gross receipts. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 67, W-2 Wage and UBIA Limitation for QBI

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - How to calculate the two separate QBI limitations for high-income taxpayers with non-SSTB businesses. - The specific formula: the QBI deduction is limited to the greater of (a) 50% of W-2 wages or (b) 25% of W-2 wages plus 2.5% of UBIA. - A critical exam trap: always use the Unadjusted Basis Immediately after Acquisition (UBIA), not the depreciated or adjusted basis of property. - The key difference between the limitation for a non-SSTB and the complete disallowance of the QBI deduction for a high-income SSTB owner. - A mental shortcut for remembering that the UBIA part of the formula is designed to benefit capital-intensive businesses. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 66, QBI Phase-out and SSTB Limitations

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The definition of a Specified Service Trade or Business (SSTB) for the QBI deduction. - The specific 2025 taxable income thresholds that trigger the QBI phase-out rules. - How to calculate the proportional phase-out of the QBI deduction for an SSTB within the income limitation range. - The key difference in how limitations apply to SSTBs versus non-SSTBs once income exceeds the initial threshold. - Why the SSTB QBI deduction is completely disallowed once taxable income surpasses the top of the phase-out range. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep