Exam 9: Deductions Employee and Self Employed Related Expenses

Match the statements that relate to each other.(Note: Choice L may be used more than once. a.Must involve the same trade or business b.Must be for the convenience of the employer c.Meals while in route d.Lodging while in route e.Out-of-town job assignment lasts for more than one year f.Can include actual cost of parking g.Payment for services rendered based on tasks performed h.Excludes use of MACRS depreciation i.Taxpayer has tools and helper provided for him j.Transportation must be allocated if taxpayer spends two weeks on business and one week sightseeing k.Paralegal obtains a law degree l.Correct match not provided -Tax home has changed

Under the simplified method,the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

For tax purposes,"travel" is a broader classification than "transportation."

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) a.Cover charge paid to entertain client at a night club. b.Deductible even if taxpayer does not take the new job c.Company picnic sponsored by employer d.Use of Federal per diem allowance to substantiate meals while in travel status e.Does not have to be job related f.Can include cost of car insurance and automobile club dues g.Distribution from plan is taxable h.Distribution from plan is not taxable i.Expatriate (U.S.person who is employed overseas)returns home to retire j.Taxpayer moves to a new residence 55 miles closer to his present job k.Country club membership fee l.Correct match not provided -Qualified tuition and related expenses (under § 222)

Which,if any,of the following expenses is subject to the 2%-of-AGI floor?

Robert entertains several of his key clients on January 1 of the current year.Expenses paid by Robert are as follows: Cab fare $ 60 Cover charge at supper club 200 Dinner at club 800 Tips to waiter 160 ​ Presuming proper substantiation,Robert's deduction is:

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) a.Cover charge paid to entertain client at a night club. b.Deductible even if taxpayer does not take the new job c.Company picnic sponsored by employer d.Use of Federal per diem allowance to substantiate meals while in travel status e.Does not have to be job related f.Can include cost of car insurance and automobile club dues g.Distribution from plan is taxable h.Distribution from plan is not taxable i.Expatriate (U.S.person who is employed overseas)returns home to retire j.Taxpayer moves to a new residence 55 miles closer to his present job k.Country club membership fee l.Correct match not provided -Keogh (H.R.10)plans

Concerning the deduction for moving expenses,what circumstances,if any,will excuse a taxpayer from meeting the time test of 39 or 78 weeks?

There is no cutback adjustment for meals and entertainment as to employees who are subject to regulation by the U.S.Department of Transportation.

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) a.Cover charge paid to entertain client at a night club. b.Deductible even if taxpayer does not take the new job c.Company picnic sponsored by employer d.Use of Federal per diem allowance to substantiate meals while in travel status e.Does not have to be job related f.Can include cost of car insurance and automobile club dues g.Distribution from plan is taxable h.Distribution from plan is not taxable i.Expatriate (U.S.person who is employed overseas)returns home to retire j.Taxpayer moves to a new residence 55 miles closer to his present job k.Country club membership fee l.Correct match not provided -Actual cost method of determining car expense

Christopher just purchased an automobile for $40,000 which he plans to claim 100% as being for business use.In order to take advantage of MACRS and § 179,he plans to use the actual cost method for determining his deduction in the first year.In subsequent years,he will switch to the automatic mileage method.Comment on Christopher's proposed approach.

For the current year,Wilbur is employed as a deputy sheriff of a county.He has AGI of $50,000 and the following unreimbursed employee expenses: Attendance at a law enforcement conference ($800 for travel and $220 for meals) $1,020 Uniforms (does not include $300 for laundry and dry cleaning) 1,000 Professional dues and journals 300 Contribution to sheriff's reelection campaign (highly recommended by Wilbur's boss) 400 ​ How much of these expenses are allowed as deductions from AGI?

Marvin lives with his family in Alabama.He has two jobs: one in Alabama and one in North Carolina.Marvin's tax home is where he lives (Alabama).

Statutory employees:

Madison and Christopher are staff accountants at a major public accounting firm.Both are pursuing a law degree in a night program at local law school.Madison contends that the cost of the program is a deduction for income tax purposes,while Christopher maintains that it is not.Who is correct and why?

One of the tax advantages of being self-employed (rather than being an employee)is:

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

In the current year,Bo accepted employment with a Kansas City law firm after graduating from law school.Her expenses for the year are listed below: Cost of bar review course $1,500 Qualified moving expenses 2,100 Job hunting expenses 1,800 Subscriptions to legal journals 450 Membership dues in bar associations 620 State bar dues 300 ​ Since Bo worked just part of the year,her salary was only $32,100.In terms of deductions from AGI,how much does Bo have?

Under the actual cost method,which,if any,of the following expenses will not be allowed?

If an individual is subject to the direction or control of another only to the extent of the end result but not as to the means of accomplishment,an employer-employee relationship does not exist.