Exam 9: Deductions: Employee and Self-Employed Related Expenses

In choosing between the actual expense method and the automatic mileage method, a taxpayer should consider the cost of insurance on the automobile.

An individual, age 40, who is not subject to the phase-out provision may contribute a deductible amount to a Roth IRA up to $5,000 per year in 2012.

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

Beth, age 51, has a traditional deductible IRA with an account balance of $221,419 of which $160,400 represents contributions and $61,019 represents earnings.In 2012, she converts her traditional IRA into a Roth IRA.What amount, if any, must Beth include in her gross income in 2012?

Brian makes gifts as follows: * Includes $2 for engraving Presuming adequate substantiation and no reimbursement, how much may Brian deduct?

In some cases it may be appropriate for a taxpayer to report work-related expenses by using both Form 2106 and Schedule C.

Marcie moved from Oregon to West Virginia to accept a better job.She incurred the following unreimbursed moving expenses: What is Nicole's moving expense deduction?

One indicia of independent contractor (rather than employee) status is when the individual performing the services is paid based on time spent (rather than on tasks performed).

For the spousal IRA provision to apply, a joint return must be filed.

A worker may prefer to be treated as an independent contractor (rather than an employee) for which of the following reasons:

Kay, a single individual, participates in her employer's SIMPLE § 401(k) plan.The plan permits participants to contribute a percentage of their salary.Kay elects to contribute 5% of her annual salary of $111,000 to the plan.On what amount of her salary does Kay pay income taxes in 2012?

During the year, Walt went from Louisville to Hawaii on business.Preceding a five-day business meeting, he spent four days vacationing at the beach.Excluding the vacation costs, his expenses for the trip are: Presuming no reimbursement, deductible expenses are:

In connection with the office in the home deduction, comment on the following:

The § 222 deduction for tuition and related expenses is available:

If an individual is ineligible to make a deductible contribution to a traditional IRA, nondeductible contributions of any amount can be made to a traditional IRA.

A participant, who is age 38, in a cash or deferred arrangement plan [§ 401(k)] may contribute up to what amount in 2012?

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

How are combined business/pleasure trips treated for travel within the United States as opposed to foreign travel?

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

Once the actual cost method is used, a taxpayer cannot change to the automatic mileage method in a later year.