Question 1

Incremental expenses of an additional night's lodging and additional day's meals that are incurred to obtain "excursion" air fare rates with respect to employees whose business travel extends over Saturday night are not deductible business expenses.

Accepted Answer

False

Question 2

Jason,who lives in New Jersey,owns several apartment buildings in Baltimore.His travel expenses to Baltimore to inspect his property are tax deductible.

Accepted Answer

According to the IRS, travel expenses for business purposes, including inspecting rental properties, are tax deductible. Therefore, Jason's travel expenses to Baltimore to inspect his property are tax deductible.

Question 3

Gambling losses are miscellaneous itemized deductions subject to the 2% of AGI floor.

Accepted Answer

Gambling losses are miscellaneous itemized deductions,and while not subject to the 2% floor,are limited to the amount of gambling winnings.

Question 4

Commuting to and from a job location is a deductible expense.

Accepted Answer

Commuting to and from a job location is considered a personal expense and is not deductible on your tax return.

Question 5

Unreimbursed employee business expenses are deductions for AGI.

Accepted Answer

The answer of Unreimbursed employee business expenses are deductions for...

Question 6

The deduction for unreimbursed transportation expenses for employees is subject to the 2% of AGI floor.

Accepted Answer

Unreimbursed transportation expenses for employees are considered as miscellaneous itemized deductions and are subject to the 2% of AGI (adjusted gross income) floor. This means that the total amount of miscellaneous itemized deductions, including unreimbursed transportation expenses, must exceed 2% of the taxpayer's AGI in order to be eligible for a deduction.

Question 7

Travel expenses for a taxpayer's spouse are deductible if the spouse is an employee,the travel is for a bona fide purpose,and the expenses are otherwise deductible.

Accepted Answer

According to IRS rules, travel expenses for a spouse can be deductible if the spouse is an employee, the travel is for a legitimate business purpose, and the expenses are otherwise deductible.

Question 8

A nondeductible floor of 2% of AGI is imposed on unreimbursed employee business expenses,investment expenses,and many other miscellaneous itemized deductions such as tax preparation fees.

Accepted Answer

This statement is true. As per the current tax laws, there is a 2% AGI floor for miscellaneous itemized deductions which means that only the amount of these expenses exceeding 2% of the taxpayer's adjusted gross income (AGI) can be deducted on their tax return. This floor applies to unreimbursed employee business expenses, investment expenses, and several other miscellaneous deductions.

Question 9

Transportation expenses incurred to travel from one job to another are deductible if a taxpayer has more than one job.

Accepted Answer

Transportation expenses incurred to travel from one job to another job are deductible as a miscellaneous itemized deduction on Schedule A Itemized Deductions if the taxpayer has more than one job. However, beginning in 2018, miscellaneous itemized deductions subject to the 2% AGI floor have been suspended and are not deductible.

Question 10

According to the IRS,a person's tax home is the location of the family residence regardless of the location of the taxpayer's principal place of employment.

Accepted Answer

According to the IRS, a person's tax home is generally considered to be the location of their principal place of business or employment, not their family residence. However, there are certain exceptions to this rule, such as for individuals who work in the transportation industry or who have a job that requires them to work in multiple locations.

Question 11

Personal travel expenses are deductible as miscellaneous itemized deductions subject to the 2% of AGI floor.

Accepted Answer

Personal travel expenses are not deductible.

Question 12

Travel expenses related to foreign conventions are disallowed unless the meeting is directly related to the taxpayer's business or is employment related and it is reasonable for the meeting to be held outside of North America.

Accepted Answer

Travel expenses related to foreign conventions are generally disallowed unless the meeting is directly related to the taxpayer's business or employment and it is reasonable for the meeting to be held outside of North America.

Question 13

If the purpose of a trip is primarily personal and only secondarily related to business,the transportation costs to and from the destination are deductible.

Accepted Answer

According to the IRS, transportation costs are only deductible if the primary purpose of the trip is business-related, not personal. If the primary purpose is personal, the transportation costs are not deductible.

Question 14

An employer-employee relationship exists where the employer has the right to control and direct the individual providing services with regard to the end result and the means by which the result is accomplished.

Accepted Answer

This is a basic definition of an employer-employee relationship according to the common law test of control. The employer has the ability to tell the employee what to do, how to do it, and when to do it.

Question 15

Deferred compensation refers to methods of compensating employees based upon their current service where the benefits are deferred until future periods.

Accepted Answer

Deferred compensation involves deferring an employee's current compensation and benefits until a later time, such as retirement or a specific date in the future.

Question 16

Taxpayers may use the standard mileage rate method when five vehicles are used simultaneously for business.

Accepted Answer

The answer of Taxpayers may use the standard mileage rate...

Question 17

If an individual is self-employed,business-related expenses are deductions for AGI.

Accepted Answer

Self-employed individuals can deduct business-related expenses from their income, which reduces their AGI (Adjusted Gross Income). This is known as a deduction for AGI.

Question 18

Travel expenses related to temporary work assignments of one year or less are deductible.

Accepted Answer

Travel expenses related to temporary work assignments of one year or less are deductible as a business expense. This includes transportation, lodging, and meals. However, if the assignment is expected to last more than one year or becomes indefinite, the travel expenses are no longer deductible.

Question 19

If an individual is not "away from home," expenses related to local transportation are never deductible.

Accepted Answer

Expenses related to local transportation can be deductible for business purposes even if the individual is not away from home.

Question 20

In determining whether travel expenses are deductible,a general rule is that if a person is reassigned for an indefinite period,the individual's tax home shifts to the new location and travel expenses are not deductible.

Accepted Answer

If a person's job is relocated for an indefinite period, their tax home will shift to the new location, and travel expenses are not deductible.

Quiz 18: Employee Expenses and Deferred Compensation