Free CFP Exam Tax Planning Practice Questions

Tax planning on the CFP exam tests individual income taxation, tax-advantaged accounts (401(k), IRA, Roth), capital gains strategies, and the interaction of tax planning with retirement, estate, and investment planning (CFP Board).

359 Questions
11 Easy
275 Medium
73 Hard
2026 Syllabus

Sample Questions

Question 1 Easy
Which of the following is considered an above-the-line deduction (adjustment to gross income)?
Solution
D is correct.

Contributions to a traditional IRA (subject to income and active participant limitations) are an above-the-line deduction, meaning they reduce gross income to arrive at adjusted gross income (AGI). State and local income taxes, mortgage interest, and real property taxes are all itemized deductions claimed on Schedule A, which are below-the-line deductions taken after AGI is determined. Other common above-the-line deductions include student loan interest, HSA contributions, the deductible portion of self-employment tax, and health insurance premiums for self-employed individuals.
Question 2 Medium
Which of the following best describes how OBBBA changed the SALT deduction?
Solution
C is correct.

OBBBA raised the SALT cap from the pre-existing TCJA $10,000\$10{,}000 to $40,000\$40{,}000 per return ($20,000\$20{,}000 MFS), for tax years 2025 through 2029. For MAGI between $500,000\$500{,}000 and $600,000\$600{,}000 ($250,000\$250{,}000 and $300,000\$300{,}000 MFS) the cap phases down by 30 cents per dollar of excess, with a floor of $10,000\$10{,}000 ($5,000\$5{,}000 MFS) reached at $600,000\$600{,}000 MAGI.
Question 3 Hard
The Patels file MFJ in 2026 with MAGI of $850,000\$850{,}000. They paid $45,000\$45{,}000 of SALT. Compute their deductible SALT under OBBBA.
Solution
B is correct.

Under OBBBA the $40,000\$40{,}000 SALT cap phases down for MAGI between $500,000\$500{,}000 and $600,000\$600{,}000, falling 30 cents per dollar of excess to a $10,000\$10{,}000 floor. Any MAGI at or above $600,000\$600{,}000 lands at the floor.

The Patels’ $850,000\$850{,}000 MAGI is far past $600,000\$600{,}000, so their cap is the $10,000\$10{,}000 floor. They can deduct $10,000\$10{,}000 of their $45,000\$45{,}000 SALT.
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