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

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Question 51

True/False

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Jake performs services for Maude.If Maude provides Jake with a helper and tools,this is indicative of independent contractor (rather than employee)status.

A) True
B) False

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Question 52

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In a direct transfer from one qualified retirement plan to another qualified retirement plan,the employer must withhold 20% of the amount of the direct transfer.

A) True
B) False

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Question 53

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

The $25 limitation on the deductibility of business gifts can be circumvented by making separate gifts to the family (e.g.,spouse,children)of the client.

A taxpayer takes six clients to an NBA playoff game.If all of the tickets (list price of $120 each)are purchased on the Internet for $1,800 ($300 each),only $60 ($120 ´ 50% cutback adjustment)per ticket is deductible.

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

If the cost of uniforms is deductible,their maintenance cost (e.g.,laundry,dry cleaning,alterations)also is deductible.

Amy works as an auditor for a large major CPA firm.During the months of September through November of each year,she is permanently assigned to the team auditing Garnet Corporation.As a result,every day she drives from her home to Garnet and returns home after work.Mileage is as follows: For these three months,Amy's deductible mileage for each workday is:

In terms of IRS attitude,what do the following expenses have in common?

Rod is employed as an auditor by a CPA firm.On most days,he commutes by auto from his home to the office (18 miles round trip).During one month,however,he has an extensive audit assignment closer to home.For this engagement,Rod drives directly from home to the client's premises and back (30 miles round trip).How much,if any,of this mileage can Rod claim as a deduction?

Once set for a year,when might the IRS change the rate for the automatic mileage method?

If an individual is subject to the direction or control of another only to the extent of the end result but not as to the means of accomplishment,an employer-employee relationship does not exist.

Sammy,age 31,is unmarried and is not an active participant in a qualified retirement plan.His modified AGI is $55,000 in 2011.The maximum amount that Sammy can deduct for a contribution to a traditional IRA is:

In terms of meeting the distance test for purposes of deducting moving expenses,which of the following statements is correct?

The § 222 deduction for tuition and related expenses is available:

During 2011,Marcie used her car as follows: 13,000 miles (business),2,400 miles (commuting),and 5,000 miles (personal).In addition,she spent $540 for tolls (business)and $410 for parking (business).If Marcie uses the automatic mileage method,what is the amount of her deduction?

Joyce,age 39,and Sam,age 40,who have been married for seven years,are both active participants in qualified retirement plans.Their total AGI for 2011 is $120,000.Each is employed and earns a salary of $65,000.What are their combined deductible contributions to traditional IRAs?

In May 2011,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2011 any deduction for moving expenses he may have claimed on his 2010 tax return.

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?

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?