Exam 6: Individual Deductions

Brice is a single,self-employed electrician who earns $60,000 per year in self-employment income.Brice paid the following expenses this year.Which of the expenses are deductible for AGI? 1.The cost of health insurance 2)The employer portion of self-employment tax paid 3)Penalty on early withdrawal of funds from a certificate of deposit

This year Riley files single and reports AGI of $66,000.Riley paid $1,200 of interest on a qualified education loan.What amounts can Riley deduct for qualifying education interest?

Shelby is working as a paralegal while attending law school at night.This year she has incurred the following expenses associated with school. What amount can Shelby deduct as an employee business expense if her modified AGI this year is $25,000?

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal authorities.

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Self employed taxpayers can deduct the cost of health insurance as long as they do not actually participate in their spouses' employer-provided health plan.A self-employed individual cannot be eligible to participate in a plan.

Frieda is 67 years old and deaf.If Frieda files as a head of household,what amount of standard deduction can she claim in 2013?

Jill currently lives in the suburbs and commutes 25 miles to her office in downtown Freeport.She is considering quitting her current job to look for new employment in the downtown area.Which of the following statements best describes how Jill can satisfy the distance test for deducting moving expenses if she accepts a new job in downtown Freeport?

Mason paid $4,100 of interest on a loan that paid tuition for him to attend a private university this year.How much of this payment can Mason deduct as interest expense on an educational loan if he files single and reports modified AGI of $90,000?

Homer is an executive who is paid a salary of $80,000.Homer also paints landscapes as a hobby.This year Homer expects to sell paintings for a total of $750 and incur the following expenses associated with his painting activities: What is the effect of Homer's hobby on his taxable income? Assume his AGI does not reflect his painting activities and that he itemizes deductions but has no other miscellaneous itemized deductions.

Andres and Lakeisha are married and file joint.Andres is 72 years old and in good health.Lakeisha is 62 years old and blind.What amount of standard deduction can Andres and Lakeisha claim this year?

An individual who forfeits a penalty for prematurely withdrawing a certificate of deposit (CD) is allowed to net the penalty against the interest income from the CD.The early withdrawal penalty is treated as an above-the-line deduction.

Rochelle,a single taxpayer (age 47) ,has an AGI of $270,000.This year,she paid medical expenses of $30,000,state income taxes of $4,000,mortgage interest of $10,600,and charitable contributions of $6,000.What would be the amount of her total itemized deductions she may claim on her tax return?

The profit motive distinguishes "business" activities from "personal" activities.

Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer,the taxpayer's spouse,or a taxpayer's dependent to attend a post-secondary institution of higher education.

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

This year,Jong paid $3,000 of interest on a qualified education loan.Jong files married joint and reports modified AGI of $137,000.What is Jong's deduction for interest expense on an educational loan?

Which of the following is a true statement?

Constance currently commutes 25 miles from her house to her existing part time job in the suburbs.Next week she begins a new full time job in another state,and this job location is 100 miles from her existing home.Because of the additional distance Constance is selling her house,and she has rented an apartment that is only 2 miles from her new job.Constance expects to pay the following moving expenses. Determine if this move qualifies for a moving expense deduction and calculate the amount (if any) of the deduction.

Which of the following is a true statement?