Question 1

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

Accepted Answer

A)  Must involve the same trade or business
B)  Must be for the convenience of the employer
C)  Meals while in route
D)  Lodging while in route
E)  Out-of-town job assignment lasts for more than one yearF) Can include actual cost of parkingG) Payment for services rendered based on tasks performedH) Excludes use of MACRS depreciationI) Taxpayer has tools and helper provided for himJ) Transportation must be allocated if taxpayer spends two weeks on business and one week sightseeingK) Paralegal obtains a law degreeL) Correct match not providedM) A) and K)
N) A) and F)

Question 2

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Cutback adjustment does not apply

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) B) and G)
N) G) and L)

Question 3

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 4

For tax year 2013, Taylor used the simplified method of determining her office in the home deduction. For 2014, Taylor must continue to use the simplified method and cannot switch to the regular (actual expense) method.

Accepted Answer

A) True 
 B)False

Question 5

A direct transfer of funds from a qualified retirement plan to an IRA is subject to the withholding rules.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)   The taxpayer's new job location must be at least 50 miles away from the old job.
B)   The taxpayer's new residence must be at least 50 miles away from the new job.
C)   The taxpayer's new residence must be at least 50 miles away from the old residence.
D)   The taxpayer's new job location must be at least 50 miles farther from the old residence than the old residence was to the old job.
E)   None of the above.F) C) and D)
G) None of the above

Question 7

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement.
-The services are performed at Sue's premises.

Accepted Answer

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

Question 8

Match the statements that relate to each other. (Note: Choice L may be used more than once.) 
-Club dues not deductible

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 I)
N) J) and K)

Question 9

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.

Accepted Answer

A) True 
 B)False

Question 10

Meg teaches the fifth grade at a local school. During the year, she spends $1,200 for school supplies for use in her classroom. On her income tax return, some of this expense is not reported and the balance is deducted in two different places. Explain what has probably happened.

Accepted Answer

Meg probably has been reimbursed for som...

Question 11

Christopher just purchased an automobile for $40,000 which he plans to claim 100% as being for business use. In order to take advantage of MACRS and § 179, he plans to use the actual cost method for determining his deduction in the first year. In subsequent years, he will switch to the automatic mileage method. Comment on Christopher's proposed approach.

Accepted Answer

First, limitations are imposed on how mu...

Question 12

For tax purposes, "travel" is a broader classification than "transportation."

Accepted Answer

A) True 
 B)False

Question 13

If a business retains someone to provide services, that person may either be an employee or be self-employed (i.e., independent contractor).
a. What are the tax advantages to the business of having the service provider classified as self-employed?
b. What are the advantages and disadvantages to the service provider of self-employed status?

Accepted Answer

a. Self-employed persons do not have to ...

Question 14

When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from the IRA upon retirement are fully taxed.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)   Qualified tuition expenses under § 222.
B)   Contribution to traditional IRA.
C)   Cost of a CPA exam review course-taxpayer just began employment with an accounting firm.
D)   Office in the home deduction for a self-employed taxpayer.
E)   None of the above.F) A) and B)
G) None of the above

Question 16

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement.
-Sue has unreimbursed expenses.

Accepted Answer

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

Question 17

For self-employed taxpayers, travel expenses are not subject to the 2%-of-AGI floor.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

Under the regular (actual expense) method, the portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

Accepted Answer

A) True 
 B)False

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

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -The services are performed at Sue's premises.

Correct Answer
verified

When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from the IRA upon retirement are fully taxed.

Correct Answer
verified

Correct Answer
verified
a. Self-employed persons do not have to ...
View Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Club dues not deductible

Correct Answer
verified

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue has unreimbursed expenses.

Correct Answer
verified

A direct transfer of funds from a qualified retirement plan to an IRA is subject to the withholding rules.

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

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

Correct Answer
verified

For tax year 2013, Taylor used the simplified method of determining her office in the home deduction. For 2014, Taylor must continue to use the simplified method and cannot switch to the regular (actual expense) method.

Correct Answer
verified

For self-employed taxpayers, travel expenses are not subject to the 2%-of-AGI floor.

Correct Answer
verified

Meg teaches the fifth grade at a local school. During the year, she spends $1,200 for school supplies for use in her classroom. On her income tax return, some of this expense is not reported and the balance is deducted in two different places. Explain what has probably happened.

Correct Answer
verified
Meg probably has been reimbursed for som...
View Answer

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.

Correct Answer
verified

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Cutback adjustment does not apply

Correct Answer
verified

Under the regular (actual expense) method, the portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

For tax purposes, "travel" is a broader classification than "transportation."

Correct Answer
verified

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.

Correct Answer
verified

Correct Answer
verified
First, limitations are imposed on how mu...
View Answer

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

Correct Answer
verified

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

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -The services are performed at Sue's premises.

Correct AnswerverifiedShow Answer

When contributions are made to a traditional IRA, they are deductible by the participant. Later distributions from the IRA upon retirement are fully taxed.

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Self-employed persons do not have to ...View AnswerShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Club dues not deductible

Correct AnswerverifiedShow Answer

Sue performs services for Lynn. Regarding this arrangement, use the legend provided to classify each statement. -Sue has unreimbursed expenses.

Correct AnswerverifiedShow Answer

A direct transfer of funds from a qualified retirement plan to an IRA is subject to the withholding rules.

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

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

Correct AnswerverifiedShow Answer

For tax year 2013, Taylor used the simplified method of determining her office in the home deduction. For 2014, Taylor must continue to use the simplified method and cannot switch to the regular (actual expense) method.

Correct AnswerverifiedShow Answer

For self-employed taxpayers, travel expenses are not subject to the 2%-of-AGI floor.

Correct AnswerverifiedShow Answer

Meg teaches the fifth grade at a local school. During the year, she spends $1,200 for school supplies for use in her classroom. On her income tax return, some of this expense is not reported and the balance is deducted in two different places. Explain what has probably happened.

Correct AnswerverifiedMeg probably has been reimbursed for som...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other. (Note: Choice L may be used more than once.) -Cutback adjustment does not apply

Correct AnswerverifiedShow Answer

Under the regular (actual expense) method, the portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For tax purposes, "travel" is a broader classification than "transportation."

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFirst, limitations are imposed on how mu...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. Self-employed persons do not have to ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Meg probably has been reimbursed for som...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
First, limitations are imposed on how mu...
View Answer

Correct Answer
verified