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Andrew is employed as a salesperson of a solar company. His employer requires him to travel extensively
during the year for work-related purposes. With reference to relevant legislation, discuss the ways (methods)
Andrew might be able to claim deductions for his car expenses
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- Joy incurs the following expenses in her business. When can she deduct the expenses if she uses the accrual method of accounting? the cash method? a. Joy rents an office building for 750 a month. Because of a cash flow problem, she is unable to pay the rent for November and December 2019. On January 5, 2019, Joy pays the 2,250 rent due for November, December, and January. b. Joy borrows 60,000 on a 1-year note on October 1, 2019. To get the loan, she has to prepay 6,200 in interest. c. Joy owes employees accrued wages totaling 20,000 as of December 31, 2019. The accrued wages are paid in the regular payroll on January 5, 2020. d. Joy purchases 2,400 worth of supplies from a local vendor. The supplies are delivered on January 29, 2019. They are fully used up on December 30, 2019. Because of unusual circumstances, a bill for the supplies arrives from the vendor on January 10, 2020, and is promptly paid. e. While at a trade convention, Joy purchases some pens and paperweights to send out as holiday gifts to her clients. She charges the 700 cost to her credit card in December 2019. She pays the credit card bill in January 2020.In 2020, Mary Kelly drove her personal car 2,800 miles for business purposes. She also incurred $182 in parking fees and $191 in turnpike tolls connected with her business trips. Compute Mary’s deduction for automobile expenses on her current year tax return, assuming all of the above expenses are valid and she elects to use the standard mileage allowance method to compute her deduction for automobile expenses. Assume Mary is self-employed.Hank was transferred from Phoenix to North Dakota on March 1 of the current year. He immediately put his home in Phoenix up for rent. The home was rented May 1 to November 30 and was vacant during the month of December. It was rented again on January 1 for six months. What expenses, if any, can Hank deduct on his return? Which deductions are for AGI, and which ones are from AGI?
- In each of the following independent situations, determine how much, if any, qualifies as a deduction for AGI under § 222 (qualified tuition and related expenses). If an amount is zero, enter "0". Click here to access Exhibit 9.1 Limitations for Qualified Tuition Deduction. a. Lily is single and is employed as an architect. During 2020, she spends $4,100 in tuition to attend law school at night. Her modified AGI (MAGI) is $64,000. How much is her deduction for AGI under § 222 (qualified tuition and related expenses)? b. Liam is single and is employed as a pharmacist. During 2020, he spends $2,400 ($2,100 for tuition and $300 for books) to take a course in herbal supplements at a local university. His MAGI is $81,000. How much is his deduction for AGI under § 222 (qualified tuition and related expenses)? c. Hailey is married and is employed as a bookkeeper. She spends $5,200 for tuition and $900 for books and supplies in her pursuit of a bachelor's degree in accounting. Her MAGI is…Rachael is a self-employed accountant. During the year, Rachael incurs the following unreimbursed expenses: (Click the icon to view the expenses.) Requirement Identify which of these expenses are deductible and the amount that is deductible by Rachael. Indicate whether they are deductible for or from AGI. (Enter a "0" in the Amount of deduction column if an item is not deductible. Ignore any AGI limitations for the purposes of this problem.) Item Amounts Deductible? Amount of deduction Data table Travel to client locations $ 1,100 Subscriptions to professional journals 180 Taking potential clients to lunch 300 Photocopying 75 Item Amount Travel to client locations $ 1,100 Subscriptions to professional journals 180 Taking potential clients to lunch 300 75 Photocopying Total 1,655 Print Done ×Shelley is a self-employed CPA. In 2020, she had gross revenue of $255,000 and expenses of $40,000 so her net self-employment income on Schedule C was $215,000. She files single. What is her self-employment tax? Specify the SS and Medicare amounts. Calculate the amount of surtax, if any, she must pay. How much can she deduct as a FOR AGI deduction?
- Milt, a self-employed attorney, incurs the following expenses in 2019: (Click the icon to view the expenses.) Which of the expenditures listed above (if any) are deductible in 2019 by Milt? (Complete all input fields. Enter a "0" if an expense is not deductible.) Business lunches for clients and prospective clients Entertainment of professional associates in his home (immediately following business meetings) Country club dues (the club is used exclusively for business) Total amount deductible in 2019 JUU Data Table Business lunches for clients and prospective clients Entertainment of professional associates in his home (immediately following business meetings) Country club dues (the club is used exclusively for business) Total Print Done $ 4,000 2,000 2,500 8,500T uses frequent flyer miles to take his family on a vacation. T received the miles duringbusiness travel paid for by his employer. The normal airfare for his vacation wouldhave cost $7,000.a. T must realize and recognize $7,000 as income.b. Although T has realized income, he will not be required to recognize it becausethe IRS has chosen, as a matter of administrative convenience, not to requiretaxpayers to recognize the value of frequent flyer tickets earned duringemployer-paid travel.c. Had T earned the frequent flyer miles during travel he had paid for himself, theissue of income realization and recognition would not arise.d. Both (a) and (c) are correct.e. Both (b) and (c) are correct. T buys a parcel of real estate for $100,000, which he finances by giving the seller a nonrecoursemortgage for the full purchase price. The debt is due in one balloon payment inYear 5. When the debt becomes due in Year 5, T decides to give the property back to theseller in satisfaction of the debt…1. Deductible transportation expenses: a.Do not include the normal costs of commuting. b.Do not include daily expenses for transportation between the taxpayer's home and temporary work locations if the taxpayer has a regular place of business. c.Include only costs incurred while away from home. d.Include meals and lodging. 2. Barry is a self-employed attorney who travels to New York on a business trip during 2021. Barry's expenses were as follows: Airfare $550 Taxis 40 Restaurant meals 150 Lodging 350 How much may Barry deduct as travel expenses for the trip? a.$0 b.$1,015 c.$940 d.$1,090 e.None of these choices are correct. 3. Which of the following is deductible as dues, subscriptions, or publications? a.Subscription to the "Journal of Taxation" for a tax attorney b.Dues to a health club for a doctor c.Dues to the drama club for a student d.Subscription to "Vogue" magazine for a corporate president e.None of these choices are correct.
- Alexa owns a condominium near Cocoa Beach in Florida. In 2023, she incurs the following expenses in connection with her condo: Insurance $ 2, 050 Mortgage interest 7, 450 Property taxes 4, 200 Repairs & maintenance 650 Utilities 4, 650 Depreciation 23, 700 During the year, Alexa rented out the condo for 137 days. Alexa's AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income. Assume that in addition to renting the condo for 137 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $47, 750 of gross rental receipts, her itemized deductions exceed the standard deduction before considering expenses associated with the condo, and her itemized deduction for non-home business taxes is less than $ 10,000 by more than the real property taxes allocated to rental use of the home. Answer theDue to a change in her living situation, Tahira Bastianich, a single taxpayer, had to repay social security benefits that she received and included in her gross income in a prior year. In 2021, she repaid more than she received in benefits. In early 2022, she received the following Form SSA-1099 reporting information about the amount of benefits paid as well as the amount of benefits repaid during the year.Assuming general rules and circumstances, choose the statement that best describes how Tahira should report this repayment on her 2021 return. 2021 SSA-1099 form data: Box 3 26,400.00 Benifits paid in 2021 Box 4 31,200.00 Benifits repaid in 2021 Box 5 -4,800.00 Net Benifits for 2021 A) She may deduct the excess repayment amount shown in Box 5 in the section for "Other Itemized Deductions" on Schedule A, indicating that this is a deduction for repayment of amounts under a claim of right OR she may use the amount to figure a refundable credit, whichever is most…Keith is an employee of a real estate company. He has negotiated car benefits with his employer. Keith was provided with the car for the period 1 April 2021 to 31 March 2022. The leased car value was $36,000 on 1 April 2021, and the car had only been leased for a year at that time. Keith is required to pay for any petrol and other maintenance costs, which he has determined to be $1,600 for the period. Advise Keith's employer as to the FBT consequences (using statutory formula method) arising out of the use of the car.