I:9-54 In the current year, Mary incurs $3,600 of unreimbursed employment-relate
ID: 2355361 • Letter: I
Question
I:9-54 In the current year, Mary incurs $3,600 of unreimbursed employment-related travel and entertainment expenses. These expenses include the following:Airfare $1,500
Taxi fare 100
Meals eaten alone while
away from home on business 300
Laundry 50
Lodging 650
Business meals with customers at
which business is discussed 500
Entertainment of customers 500
Total $3,600
Mary also pays $1,000 of investment counseling fees and $500 of tax return preparation fees in the current year. Mary’s AGI is $70,000.
a. What is the total amount of Mary’s deductible expenses?
b. Are the deductible expenses classified as for AGI or from AGI?
Explanation / Answer
Unreimbursed employee business expenses:
1500 for air fare
100 for taxi fare
150 for meals (50%)
50 for laundry
650 for lodging
250 for business meals (50%)
250 for entertainment (50%)
investment expenses:
1000 investment counseling fees
500 tax prep
total for employee business and investment: 4450.
These are miscellaneous expenses on schedule A subjet to the 2% of AGI floor.
2% of 70,000 is 1400.
4450 - 1400 = 3050 in deductible expenses