Question 1

If an employee receives a reimbursement for employee business expenses,the amount of the reimbursement is always excluded from gross income and the expenses are deductible as deductions for adjusted gross income.

Accepted Answer

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Question 2

The cost of uniforms is deductible only by self-employed taxpayers.

Accepted Answer

The answer of The cost of uniforms is deductible only...

Question 3

Itemized deductions are subject to a phase-out based on AGI for certain high-income taxpayers.

Accepted Answer

Itemized deductions may be reduced for taxpayers with an AGI above a certain threshold amount. This is commonly referred to as the "Pease limitation" and applies to high-income taxpayers.

Question 4

Educational expenses are deductible as a miscellaneous itemized deduction even if the education is required to meet the minimum requirements for the taxpayer's current job.

Accepted Answer

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Question 5

Unreimbursed employee business expenses are miscellaneous itemized deductions,subject to the 2 percent of adjusted gross income limitation.

Accepted Answer

Unreimbursed employee business expenses are classified as miscellaneous itemized deductions which are subject to the 2 percent AGI limitation.

Question 6

All personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

Accepted Answer

The $100 floor amount is applied to each individual casualty loss, not to the total amount of losses incurred during the year.

Question 7

In 2013,David,age 65,had adjusted gross income of $30,000.During the year he paid the following medical expenses: $\begin{array}{lr}
\text { Frescription medicines } & \$ 200 \
\text { Doctors } & \$ 2,100 \
\text { Medical care insurance } & \$ 400 \
\text { Crutches for a broken leg } & \$ 100
\end{array}$ What amount can David deduct as medical expenses after the adjusted gross income limitation)in calculating his itemized deductions for 2013?

Accepted Answer

For 2013, medical expenses are deductible to the extent they exceed 10% of AGI for those under 65, but since David is 65, the threshold is 7.5%. His AGI is $30,000, so 7.5% is $2,250. Total medical expenses are $2,800. Deductible amount is $2,800 - $2,250 = $550.

Question 8

If the taxpayer fails to locate a job,job hunting expenses are not deductible.

Accepted Answer

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Question 9

If a ballet dancer seeks work as a ditch digger,the expenses of job hunting may be deductible.

Accepted Answer

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Question 10

A theft loss is deductible in the year the theft is discovered,even if the theft occurred in a prior year.

Accepted Answer

According to the IRS, a theft loss can be deducted in the year it is discovered or in the year it occurred, whichever is more beneficial to the taxpayer. So, if the theft occurred in a prior year and was not discovered until the current year, the deduction can still be taken in the current year.

Question 11

Expenses of education to improve or maintain existing skills are deductible as a miscellaneous itemized deduction even if the education incidentally leads to qualification in a new job or business.

Accepted Answer

The answer of Expenses of education to improve or maintain...

Question 12

Randy is advised by his physician to install an elevator in his residence,since he is afflicted with heart disease.The cost of installing the elevator is $8,000 and it has an estimated useful life of 10 years.He installs the elevator in January of 2013,and it increases the value of his residence by $5,000.Disregarding the limitation based on adjusted gross income,how much of the cost of the elevator may Randy take into account in determining his medical expense deduction for 2013?

Accepted Answer

The cost of the elevator ($8,000) minus the increase in the value of the residence ($5,000) equals $3,000. This means that $3,000 can be taken into account for the medical expense deduction for 2013.

Question 13

The cost of an appraisal of a painting may be deducted if the purpose of the appraisal is related to the preparation of an income tax return.

Accepted Answer

The cost of an appraisal of a painting may be deducted as a miscellaneous itemized deduction on Schedule A of Form 1040 if the purpose of the appraisal is related to the preparation of an income tax return. However, this deduction is subject to a 2% of adjusted gross income (AGI) floor, meaning that the total amount of miscellaneous deductions must exceed 2% of the taxpayer's AGI before any deduction is allowed. Additionally, starting in 2018, miscellaneous itemized deductions are no longer deductible due to changes made by the Tax Cuts and Jobs Act.

Question 14

Roberto,age 50,has AGI of $110,000 for 2013.He has medical expenses of $12,000.How much of the medical expenses can Roberto deduct on his Schedule A for 2013?

Accepted Answer

For 2013, medical expenses are deductible to the extent they exceed 10% of AGI for individuals under age 65. Roberto's threshold is $11,000 (10% of $110,000), so he can deduct $1,000 ($12,000 - $11,000).

Question 15

An employee may deduct the cost of welder's safety goggles used at work as a miscellaneous itemized deduction.

Accepted Answer

Welder's safety goggles are considered necessary and ordinary expenses for an employee who works with welding equipment. As such, they can be claimed as a miscellaneous itemized deduction on Schedule A of Form 1040. However, it's important to note that miscellaneous deductions are subject to a 2% limit, meaning they can only be deducted to the extent that they exceed 2% of the taxpayer's adjusted gross income.

Question 16

Jon,age 45,had adjusted gross income of $25,000 in 2013.During the year,he incurred and paid the following medical expenses: Drugs and medicines prescribed by doctors $\quad \$ 300$
Health insurance premiums $\quad \$ 750$
Doctors' fees $\quad \$ 2,250$
Eyeglasses $\$ \quad 75$ Jon received $900 in 2013 as a reimbursement for a portion of the doctors' fees.If Jon were to itemize his deductions,what would be his allowable medical expense deduction after the adjusted gross income limitation is taken into account?

Accepted Answer

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Question 17

Which of the following is not considered a deductible medical expense?

Accepted Answer

While cosmetic surgery can sometimes have medical benefits, generally, a face lift is not considered a deductible medical expense because it is primarily for cosmetic purposes. Eye exams, prescription drugs, and medical insurance are all considered deductible medical expenses.

Question 18

The expense of a review course for a state real estate agent's exam is deductible as a miscellaneous itemized deduction by a taxpayer attempting to become an agent.

Accepted Answer

The answer of The expense of a review course for...

Question 19

Which of the following is not deductible as a medical expense on Schedule A?

Accepted Answer

Payments for marriage counseling are not deductible as a medical expense on Schedule A.

Question 20

During 2013,Mary paid the following expenses: Prescription drugs $\quad \$ 470$
Aspirin and over the counter cold capsules $\quad \$ 130$
Hospital and doctors $\quad \$ 700$
Health in surance $\quad \$ 250$ What is the total amount of medical expenses before considering the limitation based on adjusted gross income)that would enter into the calculation of itemized deductions on Mary's 2013 income tax return?

Accepted Answer

Prescription drugs, hospital, and doctors expenses are deductible, totaling $470 + $700 = $1,170. Health insurance is also deductible, adding $250, for a total of $1,420. Over-the-counter drugs are not deductible.

Quiz 5: Itemized Deductions and Other Incentives