Mathew works for Levitz Mortgage Company.The company has an accountable reimbursement plan.During the year Levitz reimburses Mathew $5,400 for his business expenses.Mathew's adjusted gross income for the year is $45,000.His business expenses are as follows:
$$\begin{array} { l r }
\text { Airfare } & \$ 2,900 \
\text { Hotel } & 1,900 \
\text { Meals } & 1,400 \
\text { Entertainment } & 1,000
\end{array}$$
What amount will Mathew be able to deduct as a miscellaneous itemized deduction?

Question

Mathew works for Levitz Mortgage Company.The company has an accountable reimbursement plan.During the year Levitz reimburses Mathew $5,400 for his business expenses.Mathew's adjusted gross income for the year is $45,000.His business expenses are as follows:
$$\begin{array} { l r } 
\text { Airfare } & \$ 2,900 \
\text { Hotel } & 1,900 \
\text { Meals } & 1,400 \
\text { Entertainment } & 1,000
\end{array}$$
What amount will Mathew be able to deduct as a miscellaneous itemized deduction?

Quizplus · Accepted Answer

Mathew's total business expenses are $2,900 + $1,900 + $1,400 = $6,200. Since the accountable reimbursement plan is used, Mathew can deduct the excess of his expenses over the reimbursement, which is $6,200 - $5,400 = $800. However, only 50% of the entertainment expenses are deductible, so the deductible amount is $800 - $500 = $300. Since Mathew's AGI is $45,000, the deductible amount is subject to the 2% of AGI floor. Therefore, Mathew can deduct $300 as a miscellaneous itemized deduction.

Mathew Works for Levitz Mortgage Company What Amount Will Mathew Be Able to Deduct as a Reimbursement