SEE Part 1 vs Part 2: which to take first

For most candidates, take Part 1 first. Part 1 covers individual income tax, and Part 2 builds on it: a partnership’s income ends up on a partner’s individual return, basis rules are the same idea at both levels, and self-employment tax appears in both. The IRS lets you take the three parts in any order, so this is a strategy choice, not a rule. The exception is someone who prepares business returns every day and rarely sees a Form 1040.

What each part covers

Both parts have the same format: 100 questions, 85 scored, 3.5 hours, 200–800 scaled score with 500 to pass, $317 per part. See the Part 1 exam format for the details.

Part 1 domains: Preliminary Work and Taxpayer Data (14), Income and Assets (17), Deductions and Credits (17), Taxation (15), Advising the Individual Taxpayer (11), Specialized Returns for Individuals (11).

Part 2 domains: Business Entities and Considerations (30), Business Tax Preparation (37), Specialized Returns and Taxpayers (18).

Part 2 is less spread out. It has three large domains instead of six mid-sized ones, and 37 of its 85 scored questions sit in one domain.

Where they overlap

The official content outline notes that some topics can appear in more than one part. The overlap between Parts 1 and 2 is real:

• Pass-through income. Part 1 tests Schedule K-1 items, basis and qualified business income from the individual’s side. Part 2 tests how the partnership or S corporation produces those items.
• Qualified business income (QBI) deduction. Listed in both outlines.
• Self-employment tax. Part 1 lists it under adjustments and under Taxation; Part 2 covers it through partnership flow-through and Schedule C.
• Basis and dispositions. Gifted, inherited and purchased basis in Part 1; business asset basis, depreciation recapture and like-kind exchanges in Part 2.
• Net operating losses and carryovers. Both parts.
• Information returns. Forms 1099 appear in both.

The overlap works in one direction. Part 1 knowledge makes Part 2 easier to learn; Part 2 knowledge helps Part 1 only in the pass-through and Schedule C topics.

Why Part 1 first usually makes sense

It is the foundation. Filing status, dependency, income inclusion, basis, capital gains and the structure of the Form 1040 all come back when you study Part 2. Learning them first means Part 2 becomes “how the business creates the numbers the individual reports”.

More candidates meet it in daily life. Even without professional experience, you have filed your own return. The vocabulary is more familiar than partnership basis or corporate earnings and profits.

It builds confidence on the widest paper. Part 1’s six domains range from dependency tests to estate tax. Passing it proves you can handle a broad syllabus, and your Part 2 preparation can then concentrate on fewer, deeper topics.

When Part 2 first is the better choice

• You work in business tax (partnerships, S corporations, bookkeeping for small companies) and rarely prepare individual returns.
• You recently studied business taxation formally and want to use that knowledge while it is fresh.

In either case, keep the overlap in mind: you will still need individual-level treatment of K-1 items and self-employment tax for Part 1 later.

Where Part 3 fits

Part 3: Representation, Practices and Procedures is about Circular 230, representation, collections, audits and the filing process rather than computing tax. It has little computation, so many candidates take it straight after whichever part they sat first while exam discipline is fresh. It does assume you understand the returns being represented, which is another reason to have Part 1 behind you.

The three-year clock

A passed part is valid for three years from the date you passed it. The clock starts on your first pass, so do not take an easy part early and then leave a gap. A common approach is to plan all three sittings within about a year, with Part 1 first, then Part 2 or Part 3, and to book each exam once you are consistently scoring well on practice questions.

Also remember the calendar. There is no testing in March and April, and the tax year tested changes with each new window. If you are studying Part 1 in early 2027, check whether you can sit it before February 28, 2027, or whether you will be studying for the next tax year.

Decision in one line

Prepare individual returns, or new to tax: Part 1 first. Spend your days on business returns: Part 2 first is reasonable. Either way, see the Part 2 guide and plan the order before you book the first exam.

Start with the Part 1 study plan.