If you’re considering sitting for the REG section of the CPA Exam, now is the time.
The CPA Exam is constantly changing to reflect real life, and each section of the CPA Exam focuses on a different element of accounting – granted, with some overlap.
But regardless, now more than ever, REG should be a priority. The American Institute of Certified Public Accountants (AICPA) has announced that there will be changes to REG as of July 1, 2020.
What are the changes to the REG section?
The changes are directly to the content that make up exam questions on REG, with updates surrounding the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE).
Repeals the maximum age (70½) up to which traditional IRA contributions can be made:
- Provides penalty-free withdrawals (up to $5,000) from retirement plans for individuals in the case of birth or adoption of a child
- Increases the age for required mandatory distributions from 70½ to 72
- Changes the tax rates that apply under the Kiddie Tax back to the parent’s tax rates (rather than trust rates)
- Changes the AGI floor for deductible medical expenses back to 7.5% (from 10%)
There also are changes coming to REG in the last quarter of the year, reflecting on the COVID-19 pandemic and the Coronavirus Aid, Relief and Economic Security Act (CARES).
In addition to providing relief to taxpayers and extending the filing deadline for 2019 taxes, this act altered the treatment of net operating losses (NOLs) that originated during the 2018-2020 period, allowing entities to carry losses back for a period of five years.
This will not be tested until Oct. 1, per the AICPA’s CPA Exam Policy on New Pronouncements, but is another change coming that will require learning new material.
What do These changes mean for CPA candidates?
While the July changes are fairly minor, they are still changes and with that they bring entirely new elements to study – closely followed by yet another learning curve with the CARES Act. Because of that, we recommend you use the knowledge you have to date from any business law and taxation classes from your undergraduate degree and sit before the changes are rolled out.
Now, you might be thinking that July 1st is right around the corner and you don’t have time to study. While that might be true with other CPA Exam review courses, Surgent CPA Review can have you exam ready in just 46 hours per CPA Exam section.
Thanks to its adaptive A.S.A.P.® Technology, Surgent CPA Review is able to help students pass the CPA Exam by focusing each student on personalized study plans that target his or her knowledge gaps. That means candidates can easily start studying now and pass REG well before July 1 – even with the current Prometric closures, especially with the emergency extension to the June testing window.