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 -Deductible moving expense

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 -Club dues deductible

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

Rod uses his automobile for both business and personal use and claims the automatic mileage rate for all purposes.During 2015,his mileage was as follows: Miles Driven Personal 4,000 Business 8,000 Qualifying moving expense 3,500 Medical 1,800 Charitable 1,500 Qualifying education (MBA program) 800 ​ How much can Rod claim for mileage?

Qualified moving expenses include the cost of lodging but not meals during the move.

The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

A taxpayer just changed jobs and incurred unreimbursed moving expenses. a.What are his (or her) options if an income tax return has to be filed before the time test is met? b.What happens if the moving expense deduction has been claimed and the time test is not later satisfied?

If a business retains someone to provide services,that person may either be an employee or be self-employed (i.e. ,independent contractor). a.What are the tax advantages to the business of having the service provider classified as self-employed? b.What are the advantages and disadvantages to the service provider of self-employed status?

Amy lives and works in St.Louis.In the morning she flies to Boston,has a three-hour business meeting,and returns to St.Louis that evening.For tax purposes,Amy was away from home.

Ramon and Ingrid work in the field of public relations and incur sizable entertainment expenses.Ramon is employed by a consumer products company,while Ingrid is a self-employed consultant.Regarding the tax treatment of the entertainment expenses,when would: a.Ramon be better off than Ingrid? b.Ingrid be better off than Ramon?

Which,if any,of the following expenses are not subject to the 2%-of-AGI floor?

Paul is employed as an auditor by a CPA firm.On most days,he commutes by auto from his home to the office.During one month,however,he has an extensive audit assignment closer to home.For this engagement,Paul drives directly from home to the client's premises and back.Mileage information is summarized below: Home to office 12 miles Office to audit client 15 miles Audit client to home 10 miles If Paul spends 20 days on the audit,what is his deductible mileage?

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

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.

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 -Time test (for moving expenses) waived

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 -Nondeductible moving expense

After graduating from college,Clint obtained employment in Omaha.In moving from his parents' home in Baltimore to Omaha,Clint incurred the following expenses: Transportation $ 700 Meals 380 Lodging 400 Cost of moving household goods 3,500 ​ a.How much may Clint deduct as moving expense? b.​ Would any deduction be allowed if Clint claimed the standard deduction for the year of the move? Explain.

In terms of income tax treatment,what is the difference between common law and statutory employees?

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 -Club dues not deductible

Once set for a year,when might the IRS change the rate for the automatic mileage method?