SEE - Special Enrollment Exam Quiz: Education And Retirement Planning

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Education And Retirement PlanningQuestion 1 of 15

Maria, age 24, is unmarried and cannot be claimed as a dependent. In 2025 she is a full-time undergraduate. She paid $6,500 of tuition and $900 of course materials. She received a $4,000 Pell grant and a $1,500 tax-free scholarship; both were applied to her tuition. Her modified AGI is $65,000, and her tax liability before any education credit is $300.

How much American opportunity credit may Maria claim for 2025?

$1,900, all of which is refundable because the American opportunity credit is a refundable credit.

$1,060, consisting of a $760 refundable credit and $300 of the nonrefundable credit used to offset tax.

$1,900, consisting of a $760 refundable credit and $1,140 of the nonrefundable credit used to offset tax.

$760, because the nonrefundable portion of the credit is limited to her tax liability.

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SEE - Special Enrollment Exam Quiz

SEE - Special Enrollment Exam Quiz: Education And Retirement Planning

Practice Education And Retirement Planning in SEE - Special Enrollment Exam with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

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This quiz focuses on Education And Retirement Planning, giving you a quick way to practice the rules, question types, and explanations that matter most for SEE - Special Enrollment Exam.

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Question 1

How much American opportunity credit may Maria claim for 2025?

$1,900, all of which is refundable because the American opportunity credit is a refundable credit.
$1,060, consisting of a $760 refundable credit and $300 of the nonrefundable credit used to offset tax. (correct answer)
$1,900, consisting of a $760 refundable credit and $1,140 of the nonrefundable credit used to offset tax.
$760, because the nonrefundable portion of the credit is limited to her tax liability.

Explanation: IRC § 25A. Qualified education expenses are reduced by tax-free educational assistance, including Pell grants and tax-free scholarships. Qualified expenses are

7,400 (

6,500 tuition + $900 course materials) less $5,500 assistance = $1,900. The American opportunity credit is 100% of the first $2,000 of those expenses, so the tentative credit is $1,900. Forty percent, $760, is refundable; the other $1,140 is nonrefundable and is allowed only to the extent of tax liability. Because Maria's tax before credits is $300, her total current-year benefit is $300 + $760 = $1,060. Choice A incorrectly treats the entire credit as refundable; Choice C incorrectly assumes the full nonrefundable portion is allowed despite the tax-liability limit; Choice D ignores the $300 nonrefundable offset.

Question 2

Dan and Dana file a joint return. In 2005, when Dan was 37, he bought Series EE savings bonds issued after 1989. In 2025 they redeemed bonds for $10,000, of which $3,000 was interest. They used $8,000 of the proceeds to pay the 2025 college tuition of their daughter, whom they claim as a dependent. Their modified AGI for the education savings bond exclusion is $175,000 before applying the exclusion.

How much of the bond interest is excluded from their 2025 gross income?

$2,400, because the interest is allocated to qualified expenses and no phaseout applies at their MAGI.
$1,200, because the phaseout reduces the qualified interest by one-half.
$340, because the qualified interest is reduced by the MAGI phaseout. (correct answer)
$0, because the redemption proceeds exceed the tuition paid and the full phaseout applies.

Explanation: IRC § 135. The tentative exclusion is the interest times the ratio of qualified higher education expenses to redemption proceeds:

3,000 × (

8,000/$10,000) = $2,400. For joint filers, the exclusion is phased out between $149,250 and $179,250 of MAGI. Their MAGI of $175,000 removes 25,750/30,000 of the tentative exclusion, leaving $2,400 × (1 − 25,750/30,000) = $340. Choice A ignores the phaseout; Choice B uses a rough half-phaseout; Choice D is wrong because the exclusion is proportional and their MAGI is below the top of the phaseout range.

Question 3

Ava, age 19, was a full-time student for nine months of 2025 and is claimed as a dependent on her parents' return. She earned $3,500 from a summer job and contributed $3,500 to a Roth IRA. Her 2025 tax liability before any credits is $150.

Which of the following is correct for Ava for 2025?

She may make the Roth IRA contribution, but she may not claim the saver's credit because she was a full-time student and is claimed as a dependent. (correct answer)
She may make the Roth IRA contribution and may claim the saver's credit because her contribution does not exceed her earned income.
She may not make the Roth IRA contribution because she is under age 21 and is claimed as a dependent.
She may not make the Roth IRA contribution because her contribution exceeds her taxable income after the standard deduction.

Explanation: IRC § 408A(c)(2) and IRC § 25B(c). A Roth IRA contribution is limited to compensation, and dependency does not affect eligibility. Ava's $3,500 contribution is allowed because it equals her wages. The saver's credit is denied to a taxpayer who is a full-time student for at least five calendar months or is claimed as a dependent on another return; Ava is both. Choice B ignores those statutory bars; Choice C invents an age limit; Choice D confuses taxable income with compensation.

Question 4

Kevin, age 47, received a $20,000 distribution from his traditional IRA on May 15, 2025, and on June 10, 2025, he deposited the full amount into a different traditional IRA as a 60-day rollover. On November 1, 2025, he received an $8,000 distribution from a third traditional IRA and wants to deposit it into another traditional IRA within 60 days.

Which of the following is correct for 2025?

He may roll over the $8,000 tax-free because the one-rollover-per-year limitation is applied separately to each IRA, not to all IRAs held by the taxpayer in the aggregate.
He may roll over the $8,000 tax-free because the November distribution came from an IRA other than the one distributed in May, and the first rollover was completed more than 60 days before the second receipt.
He may roll over the $8,000 tax-free only if he completes the rollover before December 31, 2025, because the 60-day rollover period is measured from the close of the tax year.
He may not treat the November distribution as a tax-free 60-day rollover because of the one-rollover-per-year rule; unless an exception applies, it is taxable and subject to the 10% additional tax. (correct answer)

Explanation: IRC § 408(d)(3)(B). The one-rollover-per-year limitation applies to all of an individual's IRAs in the aggregate. Because Kevin received a distribution from an IRA on May 15, 2025, and completed a 60-day rollover, he cannot treat a second IRA distribution received within one year as a tax-free rollover. The November distribution is includible unless an exception applies, and as a distribution before age 59½ it is also subject to the 10% additional tax unless an exception applies. A direct trustee-to-trustee transfer would not be barred, but the facts describe a 60-day rollover. Choice A and Choice B misstate the aggregation and measurement rules; Choice C misstates the deadline and ignores the one-year bar.

Question 5

Priya and Ravi file jointly and claim their daughter, a college sophomore, as a dependent. Their MAGI is below the phaseout for the American opportunity credit. In 2025 they received a $16,000 distribution from the daughter's 529 plan; the distribution consisted of $10,000 of contributions and $6,000 of earnings. The daughter's total qualified higher education expenses for 529 purposes were $18,000. On their 2025 return, they claim the American opportunity credit based on $4,000 of those expenses.

How much of the 529 distribution must be included in the parents' gross income?

$0, because the distribution does not exceed the daughter's total qualified higher education expenses.
$6,000, because the earnings portion of the distribution is taxable when the distribution is not used entirely for qualified expenses.
$2,000, because the expenses used for the American opportunity credit cannot also be treated as paid by the 529 distribution.
$750, because only the earnings portion of the $2,000 excess distribution is taxable. (correct answer)

Explanation: IRC § 529(c)(3)(B) and IRC § 25A. Qualified expenses are reduced by the amount of expenses used to compute an education credit before applying a QTP distribution. Thus adjusted qualified expenses are $18,000 − $4,000 = $14,000. The distribution exceeds that amount by $2,000. Only the earnings part of the excess is taxable:

2,000 × (

6,000/$16,000) = $750. Choice A ignores the reduction for the AOTC expenses; Choice C treats the $2,000 excess as all earnings; Choice B treats the entire earnings as taxable without applying the $14,000 of remaining qualified expenses.

Question 6

Ray, age 34, is single and has modified AGI of $76,000. In 2025 he took two graduate-level evening courses (six credits) at a university solely to improve skills in his current job. He is not pursuing a degree. He paid $3,200 in tuition and $150 in required fees. No one claims him as a dependent, and he received no tax-free educational assistance.

Which education credit, if any, may Ray claim for 2025?

$2,337.50, because his qualified expenses exceed $2,000 and his MAGI is below the phaseout range.
Lifetime Learning Credit of $670, because the credit is 20% of his qualified tuition and fees. (correct answer)
Lifetime Learning Credit of $2,000, the statutory maximum credit allowed per return for 2025.
No credit, because the Lifetime Learning Credit is available only to students enrolled in a degree program at an eligible school.

Explanation: IRC §§ 25A(b), 25A(c). The American opportunity credit is limited to students who are enrolled at least half-time in a program leading to a degree or other recognized credential during their first four years of postsecondary education. Ray is not degree-seeking, so the AOTC does not apply. The Lifetime Learning Credit can be claimed for any course at an eligible school to acquire or improve job skills, including graduate courses, and does not require a degree. Qualified expenses are $3,200 + $150 = $3,350, and the credit is 20% of the first $10,000, or $670, with no phaseout because his MAGI is below $80,000. Choice A applies the AOTC formula to a non-degree student; Choice C states the statutory maximum rather than the computed credit; Choice D misstates Lifetime Learning Credit eligibility.

Question 7

Robin, age 38, is single. In 2025 she received a $14,000 distribution from her traditional IRA; her basis in the IRA was $0, and no part of the distribution was a rollover. She used $9,000 of the distribution to pay qualified higher education expenses for herself (tuition, fees, books, and required supplies) at a university where she was enrolled half-time, and she used the remaining $5,000 to buy a car. These education expenses were not paid with any tax-free scholarship or educational assistance. No other §72(t) exception applies. What amount of the distribution is subject to the additional tax for early distributions under IRC §72(t)?

$0
$5,000 (correct answer)
$9,000
$14,000

Explanation: Under IRC § 72(t), a distribution from a traditional IRA received before age 59½ is subject to an additional tax unless an exception applies. Section 72(t)(2)(E) excepts distributions paid for qualified higher education expenses of the taxpayer, spouse, child, or grandchild, as defined in §72(t)(7). Robin's basis is zero, so the entire distribution is otherwise taxable. The $9,000 used for qualified higher education expenses is not subject to the additional tax; the remaining $5,000 used for the car is subject. Choice A treats the entire distribution as penalty-free because part was used for education. Choice C applies the exception in reverse, treating the car purchase as protected and the education expenses as unprotected. Choice D ignores the education exception entirely.

Question 8

Danielle, age 22, is single and cannot be claimed as a dependent by another taxpayer. In 2025, while in her second year of a bachelor's degree program, she had $5,800 of tuition and required fees. A $1,800 tax-free scholarship was paid directly to the university and applied to tuition; Danielle paid the remaining $4,000 herself. Her modified adjusted gross income for the American opportunity credit was $85,000. Her 2025 income tax liability before any credits was $1,000, and she has no other credits. What total amount of the American opportunity credit will Danielle be allowed to use for 2025?

$500
$750
$1,250 (correct answer)
$2,000

Explanation: Under IRC § 25A(i), the American opportunity credit is 100% of the first $2,000 of qualified education expenses plus 25% of the next $2,000, capped at $2,500 per eligible student. Danielle's $4,000 of qualified expenses after applying the $1,800 tax-free scholarship produce the full tentative credit of $2,500. For a single taxpayer, the phase-out range is $80,000–$90,000 of MAGI; her MAGI of $85,000 is halfway through the range, so the credit is reduced to $1,250. Forty percent of that amount, $500, is refundable; the remaining 60%, $750, is nonrefundable. Her $1,000 tax liability fully absorbs the nonrefundable portion, leaving a total allowable credit of

1,250. Thus Choice C (

1,250) is correct. Choice A (

500) is only the refundable component. Choice B (

750) is only the nonrefundable component. Choice D ($2,000) is the total credit that would result if the MAGI phase-out were ignored: $1,000 refundable plus the $1,500 nonrefundable portion limited to $1,000 of tax.

Question 9

Marco, age 47, and Lena, age 45, file jointly. Marco actively participates in a 401(k) plan at work; Lena is not employed and does not actively participate in any employer plan. Their combined compensation is $180,000, and their modified AGI before considering any IRA deduction is $240,000. Each contributes $7,000 to a traditional IRA for 2025.

How much of their IRA contributions are deductible for 2025?

$14,000, because combined compensation exceeds the total contributions and neither contribution exceeds the annual limit.
$7,000, only Lena's contribution, because Marco's deduction is eliminated but Lena's spousal IRA is fully deductible.
$4,200, only Lena's contribution, because Marco's deduction is eliminated and Lena's deduction is reduced by 40%. (correct answer)
$0, because their MAGI exceeds the start of the phaseout range for both covered and noncovered spouses.

Explanation: IRC §§ 219(c), 219(g). Marco is an active participant, so his deduction phases out between $126,000 and $146,000 of MAGI; at $240,000, his deduction is zero. Lena is not an active participant, but because her spouse is, her phaseout range is $236,000 to $246,000. At $240,000, she loses 40% of the deduction, leaving 60% of $7,000 = $4,200. She may use the spousal IRA rule because combined compensation is $180,000. Choice A ignores both phaseouts; Choice B gives Lena a full deduction despite her phaseout; Choice D ignores that MAGI is below the top of Lena's range.

Question 10

A married couple, both age 55, file a joint return for 2025. The husband had $160,000 of wages in 2025; the wife had no earned income. Neither spouse contributed to any other IRA during 2025. Their modified adjusted gross income for Roth IRA purposes is $241,000. What is the maximum total amount they may contribute to Roth IRAs for 2025?

$4,000
$7,000
$8,000 (correct answer)
$16,000

Explanation: Under IRC § 408A(c), the Roth IRA contribution limit for 2025 is $7,000 per individual, increased by the $1,000 IRA catch-up for taxpayers age 50 or older under IRC § 219(b)(5)(B). Each spouse therefore has an $8,000 pre-phase-out limit, for a combined $16,000. Because the wife had no earned income, IRC § 219(c) allows a married couple filing jointly to treat the husband's compensation as her compensation, so both spouses are eligible to contribute. For married filing jointly, the Roth IRA phase-out range is $236,000–$246,000; their MAGI of $241,000 is halfway through the range, so the combined limit is reduced by 50% to

8,000 (

4,000 per spouse), which is Choice C. Choice A ($4,000) is the husband's phased-out limit alone; it treats the wife as unable to contribute because she had no earned income, ignoring the spousal IRA rule of IRC § 219(c). Choice B applies the phase-out to $14,000, omitting both catch-up contributions. Choice D ignores the phase-out entirely.

Question 11

Which of the following is correct regarding the American opportunity tax credit (AOTC) for 2025?

Qualified education expenses for the AOTC must be reduced by tax-free scholarships received for the year, and 40% of the credit, up to $1,000, is refundable even if the taxpayer has no income tax liability. (correct answer)
A student who is claimed as a dependent on a parent's return may also claim the AOTC on the student's own return for expenses paid from the student's earnings, applying the phase-out to the student's own MAGI.
The AOTC may be claimed for a maximum of four tax years for each eligible student, plus one additional year when the student's degree program requires more than four years of full-time enrollment.
Married taxpayers filing separate returns may divide the AOTC between them in any proportion they select, as long as neither spouse uses the same qualified expenses in computing the credit.

Explanation: IRC § 25A(i), with the scholarship adjustment in § 25A(g)(2). The AOTC is 100% of the first $2,000 of qualified education expenses plus 25% of the next $2,000, so the maximum credit is $2,500, and 40% of it — up to $1,000 — is refundable. Qualified expenses must be reduced by tax-free scholarships before the credit is computed, so Choice A is correct. Choice B misstates the party: a student claimed as a dependent cannot claim the credit, and the expenses are treated as paid by the parent, with the phase-out applied to the parent's MAGI. Choice C misstates the year limit: the credit is limited to four tax years per eligible student, with no additional fifth year. Choice D misstates the filing-status rule: the education credits are denied entirely to married taxpayers filing separate returns, so there is nothing to allocate.

Question 12

Which of the following is correct regarding the deduction for student loan interest for 2025?

A student who could be claimed as a dependent by a parent but is not actually claimed may deduct student loan interest, because the bar applies only when the parent actually claims the student as a dependent.
Interest on a private loan that refinances an existing qualified education loan is deductible only when the refinancing is made by the same lender that made the original loan and the new loan does not exceed the original principal balance.
A single taxpayer who cannot be claimed as a dependent, with modified adjusted gross income of $95,000, may deduct a reduced amount of student loan interest, because the deduction is phased out between $85,000 and $100,000 of MAGI. (correct answer)
A parent who borrows under a federal PLUS loan to pay the tuition of a dependent child may not deduct the interest on that loan, because the deduction is limited to loans on which the student is the borrower.

Explanation: IRC § 221. Up to $2,500 of interest on a qualified education loan is deductible as an adjustment to income, but for single taxpayers the deduction phases out for MAGI between $85,000 and $100,000, so a single taxpayer with MAGI of $95,000 receives a reduced deduction. Choice C is correct. Choice A misstates the dependent bar in § 221(c): the deduction is denied if another taxpayer can claim the student as a dependent, regardless of whether the student is actually claimed. Choice B misstates the refinancing rule: debt incurred solely to refinance a qualified education loan is itself a qualified education loan, and the lender's identity is irrelevant. Choice D misstates who may deduct: a parent who is the borrower on a federal PLUS loan is legally obligated on a qualified education loan for a dependent's education and may deduct the interest, subject to the same MAGI phase-out.

Question 13

Which of the following is correct regarding Roth IRA contributions for 2025?

A single taxpayer age 45 with MAGI of $155,000 may contribute the full $7,000 to a Roth IRA for 2025, because the phase-out for single taxpayers begins at $160,000 of MAGI and is not complete until $175,000.
A married couple filing jointly, both under age 50, may each contribute $7,000 to a Roth IRA even if only one spouse has earned income, provided that spouse has compensation of at least $14,000 and the couple's MAGI is below $236,000. (correct answer)
A taxpayer age 52 may contribute up to $8,000 to a Roth IRA for 2025 and a separate $8,000 to a traditional IRA, because the contribution limits apply independently to Roth IRAs and traditional IRAs rather than as one combined limit.
Taxable income from a conversion of a traditional IRA to a Roth IRA is included in the modified adjusted gross income used for the Roth contribution phase-out, so a large conversion made in the same year can reduce or eliminate the amount the taxpayer may contribute to a Roth IRA.

Explanation: IRC § 408A(c), applying the § 219(c) spousal rules. For 2025 the annual IRA contribution limit is $7,000 (ages under 50), the limit applies to the combined total of traditional and Roth IRA contributions, and a married couple filing jointly may fund an IRA for each spouse using the compensation of only one spouse, if that compensation covers both contributions. The Roth phase-out for joint filers begins at $236,000 of MAGI, so the couple in Choice B may each contribute the full $7,000. Choice A misstates the single phase-out: it begins at $150,000 and ends at $165,000, so at $155,000 only a reduced contribution is allowed. Choice C misstates the combined limit: the $8,000 amount for age 52 is the maximum for all IRA contributions combined, not a separate limit for each IRA. Choice D misstates the MAGI computation: under § 408A(c)(3)(B)(i), income included in gross income because of a conversion to a Roth IRA is excluded when computing the MAGI used for the Roth phase-out, so a same-year conversion does not reduce the allowable Roth contribution.

Question 14

Which of the following is correct regarding the deduction for contributions to a traditional IRA for 2025?

A single taxpayer who is covered by a 401(k) plan and has MAGI of $90,000 may deduct a reduced traditional IRA contribution, because the phase-out range for that filing status is $79,000 to $89,000.
A married taxpayer filing separately who lived with his or her spouse at any time during 2025 may deduct a full traditional IRA contribution if only the spouse, not the taxpayer, is an active participant in a workplace plan.
A taxpayer who participates in an employer retirement plan for only one month during 2025 is not treated as an active participant for the year, so the traditional IRA deduction phase-out does not apply to that taxpayer.
For a married taxpayer filing jointly who is not covered by a workplace retirement plan but whose spouse is an active participant, the noncovered spouse's traditional IRA deduction phases out for joint MAGI between $236,000 and $246,000. (correct answer)

Explanation: IRC § 219(g) limits the traditional IRA deduction for taxpayers, and their spouses, who are active participants in employer retirement plans. For 2025, a married taxpayer filing jointly who is not an active participant but whose spouse is an active participant has a special phase-out range: the noncovered spouse's deduction is reduced for joint MAGI between $236,000 and $246,000, so Choice D is correct. Choice A misstates the endpoint: for a single active participant the range is $79,000 to $89,000, so at MAGI of $90,000 the deduction is zero, not merely reduced. Choice B misstates the married-filing-separately rule: for an MFS taxpayer who lived with the spouse at any time during the year, the $0-to-$10,000 phase-out applies if either spouse is an active participant, so the nonparticipant spouse does not get a full deduction. Choice C misstates the active-participant rule: coverage under an employer plan for any part of the year generally makes the taxpayer an active participant for the entire year, so the phase-out applies.

Question 15

Which of the following is correct regarding the elective deferral limits for employer-sponsored retirement plans for 2025?

A taxpayer age 45 participating in a 401(k) plan may defer up to $31,000 for 2025, because the $23,500 basic limit is raised by the $7,500 catch-up available to all employees who participate in the plan.
A taxpayer age 50 who participates in both a 401(k) plan and a SIMPLE IRA may defer $23,500 to the 401(k) and $16,500 to the SIMPLE IRA, because the deferral limits are applied separately to each plan.
A taxpayer age 62 participating in a 401(k) plan may defer up to $34,750 for 2025, because the $23,500 basic limit is increased by the $11,250 super catch-up for taxpayers ages 60 through 63, which replaces the regular $7,500 catch-up. (correct answer)
A taxpayer age 55 participating in a SIMPLE IRA may defer up to $16,500 for 2025, with no catch-up contribution allowed because SIMPLE catch-ups are restricted to taxpayers who have reached age 60.

Explanation: IRC § 402(g) and § 414(v). For 2025 the Section 402(g) limit on elective deferrals is $23,500, and the regular catch-up for participants age 50 or older is $7,500. Under the SECURE 2.0 rules in effect for 2025, a participant who attains age 60, 61, 62, or 63 may use the $11,250 super catch-up in place of the regular catch-up, so a 62-year-old may defer $34,750. Choice C is correct. Choice A misstates catch-up eligibility: the $7,500 catch-up is available only to participants who are at least age 50, so a 45-year-old's limit is $23,500, not $31,000. Choice B misstates aggregation: the Section 402(g) limit applies to the total of all elective deferrals an individual makes to all plans, so the taxpayer could not defer $23,500 to a 401(k) and an additional $16,500 to a SIMPLE IRA. Choice D misstates the SIMPLE catch-up: a SIMPLE IRA participant age 50 or older may make an additional $3,500 catch-up deferral, so a 55-year-old may defer $20,000.