How to read an EA exam-style tax question
Start with the taxpayer and the tax year
Before doing math, identify who the taxpayer is, which return is involved, and whether the question is asking for federal income tax, employment tax, representation procedure, or professional responsibility. Many missed questions come from solving a different problem than the one being asked.
Mark facts that control the rule
For individual questions, controlling facts often include marital status, age, support, residency, relationship, income type, holding period, basis, and whether a payment is a deduction, credit, or tax payment. For business questions, watch entity type, owner role, employee status, accounting period, business purpose, and substantiation. For representation questions, watch the notice name, deadline, authorization form, tax period, and what the practitioner is allowed to do.
Eliminate answers that use the wrong category
Exam-style questions often include choices that sound familiar but belong in the wrong category. A withholding payment is not a deduction. Form 8821 is not representation authority. A filing extension is not a payment extension. A credit does not reduce adjusted gross income. If you can name the category, you can often remove two answer choices quickly.
Do the smallest amount of math that answers the question
When math is required, write the formula before plugging in numbers. For example, gain is amount realized minus adjusted basis. Amount realized may be sales price less selling expenses. Adjusted basis may include original cost plus improvements less depreciation. This keeps you from using every number just because it appears in the fact pattern.
Review the explanation, not just the letter
A good study session ends by explaining why the correct choice wins and why the other choices fail. The goal is not to memorize one question. The goal is to recognize the tested rule when the facts are rearranged on the next attempt.