Question 1

In November 2012,Katie incurs unreimbursed moving expenses to accept a new job.Katie cannot deduct any of these expenses when she timely files her 2012 income tax return since she has not yet satisfied the 39-week time test.

Accepted Answer

The answer of In November 2012,Katie incurs unreimbursed moving expenses...

Question 2

Qualified moving expenses include the cost of lodging but not meals during the move.

Accepted Answer

According to the IRS, qualified moving expenses include the cost of lodging but not meals during the move.

Question 3

Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.

Accepted Answer

Kelly's moving expenses may still be deductible as long as she meets the distance and time tests and the move is primarily for work-related reasons, regardless of whether her new job is in the same or a different trade or business. However, the deduction for moving expenses has been suspended for most taxpayers for tax years 2018 through 2025 under the Tax Cuts and Jobs Act.

Question 4

A moving expense deduction is allowed even if at the time of the move the taxpayer did not have a job at the new location.

Accepted Answer

The IRS allows taxpayers to deduct moving expenses if they meet certain requirements, including a distance test and a time test. It is not required that the taxpayer have a job at the new location at the time of the move. However, they must work full-time for at least 39 weeks during the 12-month period following the move in order to meet the time test and qualify for the deduction.

Question 5

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.

Accepted Answer

The statement is incorrect. According to IRS rules, if the education is required by law or your employer, or if the education maintains or improves skills needed in your current employment, then the tuition may be deductible. In Lloyd's case, if he is obtaining his law degree to further his career as a CPA, then the tuition may be deductible as it is maintaining or improving his current skills. However, if he is using the law degree to pursue a completely new trade or business, then the tuition would not be deductible.

Question 6

Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.

Accepted Answer

Qualified moving expenses are deductible above the line, meaning they reduce an employee's adjusted gross income (AGI). However, beginning in 2018 and through 2025, moving expenses are only deductible for certain members of the armed forces in active duty who move pursuant to a military order.

Question 7

At age 65,Camilla retires from her job in Boston and moves to Florida.As a retiree,she is not subject to the time test in deducting her moving expenses.

Accepted Answer

The answer of At age 65,Camilla retires from her job...

Question 8

In May 2012,after 11 months on a new job,Ken is fired after he assaults a customer.Ken must include in his gross income for 2012 any deduction for moving expenses he may have claimed on his 2011 tax return.

Accepted Answer

The answer of In May 2012,after 11 months on a...

Question 9

A taxpayer who lives and works in Tulsa travels to Buffalo for five days.If three days are spent on business and two days are spent on visiting relatives,only 60% of the airfare is deductible.

Accepted Answer

The entire cost of the airfare is deductible because the primary reason for the trip is business. The days spent visiting relatives do not affect the deductibility of the transportation costs.

Question 10

An education expense deduction is not allowed if the education results in a promotion or pay raise for the employee.

Accepted Answer

An education expense deduction is allowed if the education is required by the employer or by law to keep the employee's present salary, status or job. However, it is not allowed if the education is needed to meet the minimal educational requirements of a job or qualifies an individual for a new trade or business.

Question 11

A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip.While in Chicago,taxpayer uses the hotel valet service to have some laundry done.The valet charge is a deductible travel expense.

Accepted Answer

The valet charge for laundry is considered a deductible travel expense as it was incurred while on a business trip.

Question 12

Under the right circumstances,a taxpayer's meals and lodging expense can qualify as a deductible education expense.

Accepted Answer

According to the IRS, if a taxpayer is traveling away from home primarily to take a course or attend a seminar, the cost of meals and lodging may qualify as a deductible education expense. However, there are certain restrictions and limitations to this deduction. It is important to consult with a tax professional for guidance on specific situations.

Question 13

There is no cutback adjustment for meals and entertainment as to employees who are subject to regulation by the U.S.Department of Transportation.

Accepted Answer

The answer of There is no cutback adjustment for meals...

Question 14

Daniel just graduated from college.The cost of moving his personal belongings from his parents' home to his first job site does qualify for the moving expense deduction.

Accepted Answer

According to the IRS, the cost of moving personal belongings to a new home, including the first job site, may be deductible as a moving expense as long as the distance test and time test are met. Therefore, Daniel's moving expenses may qualify for the deduction.

Question 15

Edna lives and works in Cleveland.She travels to Berlin for an eight-day business meeting,after which she spends four days touring Germany.All of Edna's airfare is deductible.

Accepted Answer

The answer of Edna lives and works in Cleveland.She travels...

Question 16

The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.

Accepted Answer

According to the tax law, if a taxpayer's employment away from home lasts for more than one year, they are no longer considered to be on a temporary assignment and must treat the new location as their tax home.

Question 17

Bob lives and works in Newark,NJ.He travels to London for a three-day business meeting,after which he spends three days touring Scotland.All of his air fare is deductible.

Accepted Answer

Since Bob traveled for business purposes, all of his air fare is deductible.

Question 18

Dove Corporation pays for a trip to Jamaica for its two top salespersons.This expense is not subject to the cutback adjustment.

Accepted Answer

The statement indicates that the expense for the trip is not subject to the cutback adjustment, therefore it will not be affected by any cost-saving measures taken by the company.

Question 19

Tired of her 60 mile daily commute,Margaret purchases a condo that is only five miles from her job.Margaret's moving expenses to her new condo are allowed and can be claimed by her as a deduction.

Accepted Answer

The answer of Tired of her 60 mile daily commute,Margaret...

Question 20

Alexis (a CPA and JD)sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm.Her moving expenses are not deductible because she has changed employment status (i.e.,went from self-employed to employee).

Accepted Answer

Moving expenses may be deductible even if a taxpayer changes employment status, as long as the new job is at least 50 miles farther away from the taxpayer's former home than the old job was. However, there may be other limitations and requirements for deducting moving expenses, so it is important to consult a tax professional or refer to IRS Publication 521 for more information.

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