Question 1

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.

Accepted Answer

s.Not deductible since it involves Faith...

Question 2

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) 
-Time test (for moving expenses) waived

Accepted Answer

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 relatedF) Can include cost of car insurance and automobile club duesG) Distribution from plan is taxableH) Distribution from plan is not taxableI) Expatriate (U.S.person who is employed overseas) returns home to retireJ) Taxpayer moves to a new residence 55 miles closer to his present jobK) Country club membership feeL) Correct match not providedM) E) and J)
N) F) and J)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Frank,a recently retired FBI agent,pays job search expenses to obtain a position with a city police department.Frank's job search expenses do qualify as deductions.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  Indicates employee status.
B)  Indicates independent contractor status.C) A) and B)
D) undefined

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

Rachel is single and has a college degree in finance.She is employed as a loan officer at a bank;her yearly AGI approximates $50,000.During the year,she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $4,100 (tuition) ,$300 (books) ,$200 (other school supplies) ,and $200 (transportation to and from campus) .Disregarding the 2%-of-AGI limitation,as to the MBA program,Rachel has a:

Accepted Answer

A)  Deduction for and deduction from AGI of $0.
B)  Deduction for AGI of $4,000 and deduction from AGI of $800.
C)  Deduction for AGI of $4,000 and deduction from AGI of $700.
D)  Deduction for AGI of $4,100 and deduction from AGI of $700.
E)  None of these.F) B) and E)
G) A) and E)

Question 8

Statutory employees:

Accepted Answer

A)  Report their expenses on Form 2106.
B)  Include common law employees.
C)  Are subject to income tax withholdings.
D)  Claim their expenses as deductions for AGI.
E)  None of these.F) B) and C)
G) All of the above

Question 9

After she finishes working at her main job,Ann returns home,has dinner,then drives to her second job.Ann may deduct the mileage between her first and second job.

Accepted Answer

A) True 
 B)False

Question 10

One of the tax advantages of being self-employed (rather than being an employee) is:

Accepted Answer

A)  The self-employment tax is lower than the Social Security tax.
B)  The cutback adjustment does not apply.
C)  The actual cost method for deducting the business use of an automobile can be selected.
D)  Job-related expenses are deductions for AGI.
E)  A deduction for an office in the home is available.F) A) and C)
G) D) and E)

Question 11

Sue performs services for Lynn.Regarding this arrangement,use the legend provided to classify each statement.
-Lynn determines when the services are to be performed.

Accepted Answer

A)  Indicates employee status.
B)  Indicates independent contractor status.C) A) and B)
D) undefined

Question 12

Lloyd,a practicing CPA,pays tuition to attend law school.Since a law degree involves education leading to a new trade or business,the tuition is not deductible.

Accepted Answer

A) True 
 B)False

Question 13

Madison and Christopher are staff accountants at a major public accounting firm.Both are pursuing a law degree in a night program at local law school.Madison contends that the cost of the program is a deduction for income tax purposes,while Christopher maintains that it is not.Who is correct and why?

Accepted Answer

Both are partly correct and incorrect.Th...

Question 14

Alfredo,a self-employed patent attorney,flew from his home in Chicago to Miami,had lunch alone at the airport,conducted business in the afternoon,and returned to Chicago in the evening.His expenses were as follows:
  What is Alfredo's deductible expense for the trip?

Accepted Answer

$1,002 ($900 + $60 +...

Question 15

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?

Accepted Answer

400 miles ...

Question 16

In choosing between the actual expense method and the automatic mileage method,a taxpayer should consider the cost of insurance on the automobile.

Accepted Answer

A) True 
 B)False

Question 17

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) 
-Actual cost method of determining car expense

Accepted Answer

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 relatedF) Can include cost of car insurance and automobile club duesG) Distribution from plan is taxableH) Distribution from plan is not taxableI) Expatriate (U.S.person who is employed overseas) returns home to retireJ) Taxpayer moves to a new residence 55 miles closer to his present jobK) Country club membership feeL) Correct match not providedM) D) and L)
N) F) and J)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Under the right circumstances,a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Accepted Answer

A) True 
 B)False

Question 20

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) 
-Job hunting expenses

Accepted Answer

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 relatedF) Can include cost of car insurance and automobile club duesG) Distribution from plan is taxableH) Distribution from plan is not taxableI) Expatriate (U.S.person who is employed overseas) returns home to retireJ) Taxpayer moves to a new residence 55 miles closer to his present jobK) Country club membership feeL) Correct match not providedM) C) and J)
N) A) and E)

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

Frank,a recently retired FBI agent,pays job search expenses to obtain a position with a city police department.Frank's job search expenses do qualify as deductions.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

In choosing between the actual expense method and the automatic mileage method,a taxpayer should consider the cost of insurance on the automobile.

Correct Answer
verified

Lloyd,a practicing CPA,pays tuition to attend law school.Since a law degree involves education leading to a new trade or business,the tuition is not deductible.

Correct Answer
verified

Correct Answer
verified
400 miles ...
View Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Actual cost method of determining car expense

Correct Answer
verified

One of the tax advantages of being self-employed (rather than being an employee) is:

Correct Answer
verified

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Job hunting expenses

Correct Answer
verified

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.

Correct Answer
verified

After she finishes working at her main job,Ann returns home,has dinner,then drives to her second job.Ann may deduct the mileage between her first and second job.

Correct Answer
verified

Correct Answer
verified
Both are partly correct and incorrect.Th...
View Answer

Correct Answer
verified
s.Not deductible since it involves Faith...
View Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Time test (for moving expenses) waived

Correct Answer
verified

Statutory employees:

Correct Answer
verified

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

Correct Answer
verified

Alfredo,a self-employed patent attorney,flew from his home in Chicago to Miami,had lunch alone at the airport,conducted business in the afternoon,and returned to Chicago in the evening.His expenses were as follows: What is Alfredo's deductible expense for the trip?

Correct Answer
verified
$1,002 ($900 + $60 +...
View Answer

Under the right circumstances,a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Correct Answer
verified

Sue performs services for Lynn.Regarding this arrangement,use the legend provided to classify each statement. -Lynn determines when the services are to be performed.

Correct Answer
verified

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

Correct Answer
verified

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

Frank,a recently retired FBI agent,pays job search expenses to obtain a position with a city police department.Frank's job search expenses do qualify as deductions.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In choosing between the actual expense method and the automatic mileage method,a taxpayer should consider the cost of insurance on the automobile.

Correct AnswerverifiedShow Answer

Lloyd,a practicing CPA,pays tuition to attend law school.Since a law degree involves education leading to a new trade or business,the tuition is not deductible.

Correct AnswerverifiedShow Answer

Correct Answerverified400 miles ...View AnswerShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Actual cost method of determining car expense

Correct AnswerverifiedShow Answer

One of the tax advantages of being self-employed (rather than being an employee) is:

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Job hunting expenses

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

After she finishes working at her main job,Ann returns home,has dinner,then drives to her second job.Ann may deduct the mileage between her first and second job.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBoth are partly correct and incorrect.Th...View AnswerShow Answer

Correct Answerverifieds.Not deductible since it involves Faith...View AnswerShow Answer

Match the statements that relate to each other.(Note: Choice L may be used more than once. ) -Time test (for moving expenses) waived

Correct AnswerverifiedShow Answer

Statutory employees:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Alfredo,a self-employed patent attorney,flew from his home in Chicago to Miami,had lunch alone at the airport,conducted business in the afternoon,and returned to Chicago in the evening.His expenses were as follows: What is Alfredo's deductible expense for the trip?

Correct Answerverified$1,002 ($900 + $60 +...View AnswerShow Answer

Under the right circumstances,a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Correct AnswerverifiedShow Answer

Sue performs services for Lynn.Regarding this arrangement,use the legend provided to classify each statement. -Lynn determines when the services are to be performed.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
400 miles ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Both are partly correct and incorrect.Th...
View Answer

Correct Answer
verified
s.Not deductible since it involves Faith...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$1,002 ($900 + $60 +...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified