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

A taxpayer who lives and works in Tulsa travels to Buffalo for five days.If three days are spent on business and two days are spent on visiting relatives,only 60% of the airfare is deductible.

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

Elsie lives and works in Detroit.She is the regional sales manager for a national fast-food chain.Due to unusual developments,she is compelled to work six straight weeks in the Cleveland area.Instead of spending the weekend there,she flies home every Friday night and returns early Monday morning.The cost of coming home for the weekend approximates $600.Had she stayed in Cleveland,deductible meals and lodging would have been $700.How much,if any,may Elsie deduct as to each weekend?

Jackson gives his supervisor and her husband each a $30 box of chocolates at Christmas.Jackson may claim only $25 as a deduction.

A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction.

A taxpayer who maintains an office in the home to conduct his only business will not have nondeductible commuting expense.

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

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).

After completing an overseas assignment in Oslo (Norway),Daniel retires from Pelican Corporation and moves to a retirement community in Key West (Florida).Daniel's moving expenses from Oslo to Key West are deductible as they are exempt from the time test.

Under the automatic mileage method,one rate does not cover every type of expense.For 2017,what are the rates for business use,education,moving,charitable,and medical?

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

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.

Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.

On their birthdays,Lily sends gift certificates (each valued at $25) to Caden (a key client) and to each of Caden's two minor children.Lily can deduct only $25 as to these gifts.

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 -Mixed use (both business and pleasure) foreign travel

After graduating from college with a degree in chemistry,Alberto obtains a job as a chemist with DuPont.Alberto's job search expenses qualify as deductions.

Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Madison is an instructor of fine arts at a local community college.If she spends $600 (not reimbursed) on art supplies for her classes,$250 of this amount can be claimed as a deduction for AGI.

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

A moving expense deduction is allowed even if at the time of the move the taxpayer did not have a job at the new location.