The CPA exam uses 2016 and 2017 tax law

2016 schedule a
Schedule A for 2016

As I have mentioned before, I am studying for the CPA exam. I hope to take REG before the testing window closes for this quarter (September 2018). The whole exam has a reputation for being very difficult. I’m sure is true.

However, I just came across something that seems to make it even more confusing: the exam that I will be taking will be testing for 2016 and 2017 tax law. And it’s not clear which topics are for which year. For example:

  • The medical expense floor on Schedule A is being tested as 10% floor (7.5% for those born before  January 2, 1952).  This is from 2016 tax law.
  • Section 179 is using $510,000 and $2,030,000 for the limits. This is from 2017 tax law.

The tax year is not given in any of the study materials I have seen. Only the amounts. This might not seem like a problem for somebody who has never prepared taxes before. I do wonder if it is a problem for those of us who have prepared tax returns.

I say this because I like to look up the instructions for the form, and the form itself, as I

2017 section 179
2017 instructions for Form 4562, where Section 179 expenses are reported

study. I print the form and write notes on it. I’ve worked with most of these forms (for individual/1040) many times, and studying in this way helps me see better what is going on.

As it is now, it isn’t immediately clear to me which year’s forms/instructions I should use. I have to look at them carefully and compare them with the study materials to make sure I am using the correct one.

But besides that, it just seems ad hoc to me that we are being tested on different years’ tax law. If there is a principled basis for having different topics with different tax years, at this time it is not clear to me what that basis is. If that changes, I will post an update.



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