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

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Question 81

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Felicia, a recent college graduate, is employed as an accountant by an oil company. She would like to continue her education and obtain a law degree. Discuss Felicia's tax status if she attends a local law school on a: a. Part-time basis. b. Full-time basis.

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a. Regarding the usual education expense...

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Question 82

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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.

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Question 83

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Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

A taxpayer who claims the standard deduction may be able to claim an office in the home deduction.

How are combined business/pleasure trips treated for travel within the United States as opposed to foreign travel?

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.

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

Under the actual expense method, which, if any, of the following expenses will not be allowed?

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

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. a. Indicates employee status. b. Indicates independent contractor status. -The services are performed at Sue's premises.

Which is not an advantage of a § 401(k) plan over a traditional IRA?

Arnold is employed as an assistant manager in the furniture division of a national chain of department stores. He is a recent college graduate with a degree in marketing. During 2018, he enrolls in the evening MBA program of a local university and incurs the following expenses: tuition, $4,200? books and computer supplies, $800? transportation expense to and from the university, $450? and meals while on campus, $400. Arnold is single and his annual AGI is $64,000. As to these expenses, what is Arnold's deduction for AGI?