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Exam 9: Deductions Employee and Self Employed Related Expenses

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Question 91

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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 -Automatic mileage method

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Question 92

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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).

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B) False

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Question 93

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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 cutback adjustment.

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

Jacob is a landscape architect who works out of his home.He wonders whether or not he will have nondeductible commuting expenses when he drives to the locations of his clients.Please comment.

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

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.

In November 2016,Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2016 income tax return since she has not yet satisfied the 39-week time test.

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.

Isabella is a dental hygienist who works for five different dentists.She spends one day a week (i.e. ,Monday through Friday)with each.All of the dentists except Dr.Stanki (the Wednesday assignment)treat her as an employee.Dr.Stanki,however,classifies her as being self-employed.Comment on this discrepancy in treatment.

Which of the following expenses,if any,qualify as deductible?

Noah moved from Delaware to Arizona to accept a better job.He incurred the following unreimbursed moving expenses: ​ Transportation $3,000 Lodging 400 Meals in route 500 Penalty for breaking apartment lease 1,000 Forfeiture of athletic club membership 500 Moving company cost 7,000 ​ What is Noah's moving expense deduction?

After the automatic mileage rate has been set by the IRS for a year,it cannot later be changed by the IRS.

Meredith holds two jobs and attends graduate school on weekends.The education improves her skills,but does not qualify her for a new trade of business.Before going to the second job,she returns home for dinner.Relevant mileage is as follows: Home to first job 9 miles First job to second job 13 miles Home to second job 15 miles Home to university 7 miles ​ How much of the mileage qualifies for deduction purposes?

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 -Education expense that is not deductible to maintain or improve existing skills

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip.While in Chicago,taxpayer uses the hotel valet service to have some laundry done.The valet charge is a nondeductible personal travel expense.

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.