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

Flamingo Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains. The cost of operating the cafeteria is not subject to the overall limitation (50%).

On February 1, 2018, Tuan withdrew $15,000 from his IRA #1. He deposited the funds back into IRA #1 within 60 days (a"rollover"). Tuan may do one more nontaxable rollover distribution from either IRA #1 or IRA #2 in April 2018.

In which, if any, of the following situations is the automatic mileage available?

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?

During 2018, Eva (a self-employed accountant who also works part-time for a CPA firm) used her car as follows: 12,000 miles (business), 1,400 miles (commuting), and 4,000 miles (personal). In addition, she spent $440 for tolls (business) and $620 for parking (business). If Eva uses the automatic mileage method, what is the amount of her deduction?

Robert entertains several of his key clients on January 1 of the current year. Expenses paid by Robert are as follows: Presuming proper substantiation, Robert's deduction is:

Mallard Corporation pays for a trip to Aruba for its two top salespersons. This expense is subject to the overall limitation (50%).

Bob lives and works in Newark, NJ. He travels to London for a three-day business meeting, after which he spends three days touring Scotland. All of his air fare is deductible.

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

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

Myra's classification of those who work for her as independent contractors is being questioned by the IRS. It is the position of the IRS that these workers are really employees. What type of factors can Myra utilize to justify her classification?

The work-related expenses of an independent contractor are treated as itemized deductions.

An education expense deduction may be allowed even if the education results in a promotion or pay raise for the employee.

Allowing for the overall limitation (50% reduction for meals), which of the following trips, if any, will qualify for the travel expense deduction?

Dana, age 31 and unmarried, is an active participant in a qualified retirement plan. Her AGI is $124,000. What amount, if any, may Dana contribute to a Roth IRA in 2018?

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 has unreimbursed expenses.

Aiden performs services for Lucas. Which, if any, of the following factors indicate that Aiden is an employee, rather than an independent contractor?

Corey is the city sales manager for "RIBS," a national fast food franchise. Every working day, Corey drives his car as follows: Corey renders an adequate accounting to his employer. As a result, Corey's reimburseable mileage is:

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 was trained by Lynn.

Eileen lives and works in Mobile. She travels to Rome for an eight-day business meeting, after which she spends two days touring Italy. All of Eileen's airfare is deductible.