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

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Question 51

Multiple Choice

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In contrasting the reporting procedures of employees and self-employed persons regarding job-related transactions, which of the following items involve self-employed?

A) Schedule C of Form 1040.
B) Form 2106.
C) Form W-2.
D) Schedule A of Form 1040.
E) None of the above.

F) A) and E)
G) A) and D)

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Question 52

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

A) True
B) False

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Question 53

Multiple Choice

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

When is a taxpayer's work assignment in a new locale temporary? Permanent? What difference does it make?

Gwen went to Paris on business.While there, she spent 60% of the time on business and 40% on vacation.How much of the air fare of $4,000 can she deduct based on the following assumptions:

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:

Bill 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, Bill drives directly from home to the client's premises and back. Mileage information is summarized below: If Bill spends 21 days on the audit, what is his deductible mileage?

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.

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 home and second job.

Debby is a self-employed accountant with a qualified defined benefit plan (a Keogh plan) .She has the following income items for the year: What is the maximum amount Debby can deduct as a contribution to her retirement plan in 2012, assuming the self-employment tax rate is 15.3%?

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

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

Logan, Caden, and Olivia are three unrelated parties who claim the standard deduction.All are married and attend Citron University and each pays tuition of $6,100.Of this payment, Logan can claim a deduction of $4,000; Caden a deduction of $2,000; and Olivia no deduction at all.Explain.

Carolyn 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: $3,900 (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, Carolyn has a:

A participant has an adjusted basis of $0 in any nondeductible contributions to a traditional IRA.

Tired of her 60 mile daily commute, Margaret purchases a condo that is only five miles from her job.Margaret's moving expenses to her new condo are allowed and can be claimed by her as a deduction.

A participant who is at least age 59 1/2 can make a tax-free qualified withdrawal from a Roth IRA after a five-year holding period.

Every year, Penguin Corporation gives each employee a fruit basket and a bottle of wine at Christmas.These gifts are not subject to the cutback adjustment.

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

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