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

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Question 61

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Marvin lives with his family in Alabama.He has two jobs: one in Alabama and one in North Carolina.Marvin's tax home is where he lives (Alabama).

A) True
B) False

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Question 62

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Discuss the 2%-of-AGI floor and the 50% cutback limitation in connection with various employee expenses under the following arrangements:

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Question 63

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Contributions to a Roth IRA can be made up to the due date (including extensions)of the taxpayer's income tax return.

Alexis (a CPA and JD)sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm.Her moving expenses are not deductible because she has changed employment status (i.e.,went from self-employed to employee).

Taylor performs services for Jonathan on a regular basis.There exists considerable doubt as to whether Taylor is an employee or an independent contractor.

During the year,Oscar travels from Raleigh to Moscow (Russia) on business.His time was spent as follows: 2 days travel (one day each way) ,2 days business,and 2 days personal.His expenses for the trip were as follows (meals and lodging reflect only the business portion) : Presuming no reimbursement,Oscar's deductible expenses are:

For tax purposes,a statutory employee is not treated the same as a common law employee.

Elaine,the regional sales director for a manufacturer of exercise equipment,pays $2,500 to rent a skybox for a visiting performance of the Harlem Globetrotters.The skybox holds 10 seats,and Elaine invites 7 clients to the event.Nonluxury seats range in price from $80 to $120.The refreshments provided during the event cost $600.If Elaine meets all of the requirements for deductibility (i.e.,business discussion,substantiation) ,she may deduct:

Marie establishes a Roth IRA at age 40 and contributes the maximum amount per year to the Roth IRA for 25 years.The account is now worth $199,000,consisting of $75,000 in contributions plus $124,000 in accumulated earnings.How much can Marie withdraw tax free in 2011?

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

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

For the current year,Horton was employed as a deputy sheriff of a county.He had AGI of $50,000 and the following unreimbursed employee expenses: How much of these expenses are allowed as deductions from AGI?

A taxpayer just changed jobs and incurred unreimbursed moving expenses.

Janet,who lives and works in Newark,travels to Atlanta for a Thursday-Friday business conference.She stays over after the conference and visits relatives and friends on Saturday.Under certain circumstances,the meals and lodging expenses for Saturday can be considered as business related.

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

The maximum annual elective contribution for a participant who is age 40 in a § 401(k)plan is $16,500 for 2011.

Some transactions can qualify as either business entertainment or as a business gift.In such cases,the business entertainment classification usually predominates.However,in one situation a choice between the two is allowed.Explain.

During the year,Walt went from Louisville to Hawaii on business.Preceding a five-day business meeting,he spent four days vacationing at the beach.Excluding the vacation costs,his expenses for the trip are: Presuming no reimbursement,deductible expenses are:

Concerning the deduction for moving expenses,what circumstances,if any,will excuse a taxpayer from meeting the time test of 39 or 78 weeks?

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