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.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 -Roth IRAs

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

Ashley and Matthew are husband and wife and both are practicing CPAs.On a joint return,Ashley gets to deduct her professional dues but Matthew does not.Explain.

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 -Deemed substantiation

As to meeting the time test for purposes of deducting moving expenses,which of the following statements is correct?

Under the actual cost method,which,if any,of the following expenses will not be allowed?

For tax purposes,"travel" is a broader classification than "transportation."

Which,if any,of the following expenses is subject to the 2%-of-AGI floor?

Faith just graduated from college and she needs advice on the tax treatment of the costs she incurs in connection with her first job (a sales person for a pharmaceutical company).Specifically,she wants to know about the following items: a.​Job search costs. b.​Business wardrobe cost. c.​Moving expenses. d.Deduction for office in the home.

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. a.Indicates employee status. b.Indicates independent contractor status. -Sue files a Schedule SE with her Form 1040.

In the current year,Bo accepted employment with a Kansas City law firm after graduating from law school.Her expenses for the year are listed below: ​ Since Bo worked just part of the year,her salary was only $32,100.In terms of deductions from AGI,how much does Bo have?

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

Nick Lee is a linebacker for the Baltimore Ravens (a professional football club).During the football season he rents an apartment in a Baltimore suburb.The rest of the time he lives with his family in Ann Arbor (MI) and works at a local bank as a vice president in charge of public relations.Can Nick deduct his expenses while away from Ann Arbor? Explain.

Which,if any,of the following factors is not a characteristic of independent contractor status?

Mallard Corporation pays for a trip to Aruba for its two top salespersons.This expense is subject to the cutback adjustment.

A taxpayer who uses the automatic mileage method for the business use of an automobile can change to the actual cost method in a later year.

A taxpayer who uses the automatic mileage method to compute auto expenses can also deduct the business portion of tolls and parking.

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 -Job hunting expenses

In the case of an office in the home deduction,the exclusive business use test does not apply when the home is used as a daycare center.

The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.