2011 Regulation 2 Text Update - This first page gives a...

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This first page gives a listing of the corrected lecture text pages that follow. Print these corrected pages and insert in the lecture text. REGULATION Date Added Lecture Page Number Description 03/14/2011 R-2 11 Text change 03/14/2011 R-2 12 Text change 03/14/2011 R-2 13 Add text 03/14/2011 R-2 17 Delete text from heading; Text change 03/14/2011 R-2 20 Add text 03/14/2011 R-2 23 Add text to (2)(b) 03/14/2011 R-2 23 Delete text from (3) 03/14/2011 R-2 29 Add text 03/14/2011 R-2 35 Delete text; Renumber outline 03/14/2011 R-2 39 Add text 04/18/2011 R-2 16 Changed number values in table
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Becker Professional Education | CPA Exam Review Regulation 2 © 2010 DeVry/Becker Educational Development Corp. All rights reserved. R2- 11 E. Tuition and Fees Deduction The qualified higher education expenses above-the-line deduction (adjustment) applies regardless of whether the education is work-related. Expenses above the maximum are only deductible as education expenses (itemized deductions subject to 2% of AGI limitation.) 1. Maximum 2010 $4,000 [Note: Under the tax law in effect at the date of this publication, this adjustment has expired as of December 31, 2009; however, legislation is pending that should extend this adjustment through December 31, 2010.] 2. Maximum Income Limit The maximum adjustment of $4,000 is allowed for taxpayers with AGI equal to or less than $65,000 ($130,000 for joint filers). The maximum adjustment is $2,000 for taxpayers with AGI in excess of $65,000 ($130,000 for joint filers) but less than or equal to $80,000 ($160,000 for joint filers). No adjustment exists for taxpayers with AGI in excess of $80,000 ($160,000 for joint filers). 3. Restriction on Deduction A taxpayer is not eligible to claim the deduction if the expenses were applied to either: a. The American Opportunity Credit and/or Lifetime Learning Credit b. Non-Taxable Education Savings Account distributions F. Health Savings Accounts 1. Pre-Tax Contribution Health Savings Accounts (HSAs) enable workers with high-deductible health insurance to make pre-tax contributions of up to $3,050 in 2011 ($6,150 for families) to cover health care costs. These amounts are increased by $1,000 for those who reach age 55 within the tax year. No contributions are allowed once a taxpayer becomes covered by Medicare Parts A or B. 2. Excludable Withdrawals Any amount paid or distributed out of an HSA that is used exclusively to pay the qualified medical expense of any account beneficiary is not includible in gross income. a. An exception is distributions not used to pay qualified medical expenses are includible in gross income and subject to a 10 percent penalty. 3. High Deductible Plan Defined For 2010, a high-deductible health plan is a plan that has at least a $1,200 annual deductible for self-only coverage and a $2,400 deductible for family coverage. These amounts are indexed for inflation.
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Regulation 2 Becker Professional Education | CPA Exam Review R2- 12 © 2010 DeVry/Becker Educational Development Corp. All rights reserved.
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2011 Regulation 2 Text Update - This first page gives a...

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