Exam 9: Employee Expenses and Deferred Compensation

A taxpayer moves for employment in November 2017 and pays all of the moving expenses by December 31.Because he cannot satisfy the 39-week employment test,he cannot claim the moving expense deduction until the following year.

Travel expenses related to foreign conventions are disallowed unless the meeting is directly related to the taxpayer's business or is employment related,and it is reasonable for the meeting to be held outside of North America.

There are several different types of qualified retirement plans.One common criteria across qualified retirement plans is that employers deduct the contributions and employees include the contributions in taxable income in the same period.

A sole proprietor will not be allowed to deduct current home office expenses to the extent that they create or increase a loss from her business.

Which statement is correct regarding SIMPLE retirement plans?

Austin incurs $3,600 for business meals while traveling for his employer,Tex,Inc.Austin is reimbursed in full by Tex pursuant to an accountable plan.What amounts can Austin and Tex deduct?

Sam retired last year and will receive annuity payments for life from his employer's qualified retirement plan of $30,000 per year starting this year.During his years of employment,Sam contributed $130,000 to the plan on an after-tax basis.Based on IRS tables,his life expectancy is 260 months.This year,Sam will include what amount in income?

Tessa is a self-employed CPA whose 2017 net earnings from her business (before the H.R.10 plan contribution but after the deduction for one-half of self-employment taxes) is $400,000.What is the maximum contribution that Tessa can make on her behalf to her H.R.10 (Keogh) plan in 2017?

The following individuals maintained offices in their home: (1) Dr.Austin is a self-employed surgeon who performs surgery at four hospitals.He uses his home for administrative duties as he does not have an office in any of the hospitals. (2) June,who is a self-employed plumber,earns her living in her customer's homes.She maintains an office at home where she bills clients and does other paperwork related to her plumbing business. (3) Cassie,who is an employee of Montgomery Electrical,is provided an office at the workplace but does significant administrative work at home.Her employer does not require her to do extra work but she feels it is necessary in order to properly do her job. Who is entitled to a home office deduction?

Alex is a self-employed dentist who operates a qualifying office in his home.Alex has $180,000 gross income from his practice and $160,000 of expenses directly related to the business,i.e.,non-home office expenses.Alex's allocable home office expenses for mortgage interest expenses and property taxes are $14,000 and other home office expenses are $9,000.What is Alex's total allowable home office deduction?

A three-day investment conference is held in Las Vegas.Dr.Singh,a dentist,travels from Ohio to attend to improve his taxable investment portfolio performance.Ms.Gondin,a financial planner,travels from Seattle to attend the same conference to improve her skills in managing her clients' investment portfolios.The same standards of deductibility will apply to both attendees.

Travel expenses related to temporary work assignments of two years or less are deductible.

The maximum tax deductible contribution to a Roth IRA in 2017 is $5,500 ($6,500 for a taxpayer age 50 or over).

Fiona is about to graduate college with a management degree.She has been offered a job as a sales representative for a pharmaceutical company.The job will require significant travel and entertainment expenses for which she will be given a salary supplement.What tax issues should Fiona consider in her decision?

In addition to the general requirements for in-home office expenses,employees must also prove that the exclusive use of the office is for the convenience of the employer.

In determining whether travel expenses are deductible,a general rule is that if a person is reassigned for an indefinite period,the individual's tax home shifts to the new location and travel expenses are not deductible.

Daniel has accepted a new job and is reviewing the retirement plan information.He has a choice of participating in the company's conventional Sec.401(k) plan or a Roth 401(k) plan.Explain the difference between the two plans in terms of employee contributions and retirement distributions from the plan.

Norman traveled to San Francisco for four days on vacation,and while there spent another two days conducting business for his employer.Norman's plane fare for the trip was $500; meals cost $150 per day; hotels cost $300 per day; and a rental car cost $150 per day that was used for all six days.Norman was not reimbursed by his employer for any expenses.Norman's AGI for the year is $40,000 and he did not have any other miscellaneous itemized deductions.Norman may deduct (after limitations)

Transportation expenses incurred to travel from one job to another are deductible if a taxpayer has more than one job.

Johanna is single and self-employed as a technology consultant.She wants to set money aside for her retirement.What tax and financial issues should she consider?