Question 1

Employers can provide numerous benefits to their employees and the employees are permitted to exclude the value of these benefits from gross income.What are the effects of the exclusions on:

Accepted Answer

The answer of Employers can provide numerous benefits to their...

Question 2

Which,if any,of the following factors is not a characteristic of independent contractor status?

Accepted Answer

A)  Work-related expenses are reported on Form 2106.
B)  Receipt of a Form 1099 reporting payments received.
C)  Workplace fringe benefits are not available.
D)  Services are performed for more than one party.
E)  None of the above.F) A) and E)
G) All of the above

Question 3

Tired of renting,Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire does not qualify as a uniform expense.

Accepted Answer

A) True 
 B)False

Question 4

Sonja is a United States citizen who has worked in Spain for the past 10 months.She received $8,000 a month as compensation.Her employer has offered to extend Sonja's contract to work in Spain for another 6 months at the same rate of pay.If she rejects the offer,she can return to the United States and receive a salary of $10,000 per month.While working in Spain,she is subject to the Spain income tax,which is approximately 11% of her gross pay.The marginal tax rate on her income taxed in the United States is 25%.Compare Sonja's after-tax income assuming she remains in Spain with her after-tax income if she returns to the United States.

Accepted Answer

If Sonja returns to the United States,sh...

Question 5

If an individual is ineligible to make a deductible contribution to a traditional IRA,nondeductible contributions of any amount can be made to a traditional IRA.

Accepted Answer

A) True 
 B)False

Question 6

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

Accepted Answer

She can deduct her moving expe...

Question 7

After the automatic mileage rate has been set by the IRS for a year,it cannot later be changed by the IRS.

Accepted Answer

A) True 
 B)False

Question 8

Aiden performs services for Lucas.Which,if any,of the following factors indicate that Aiden is an employee,rather than an independent contractor?

Accepted Answer

A)  Aiden provides his own support services (e.g.,work assistants) .
B)  Aiden obtained his training (i.e.,job skills) from his father.
C)  Aiden is paid based on hours worked.
D)  Aiden makes his services available to others.
E)  None of the above.F) A) and D)
G) A) and E)

Question 9

Madison and Christopher are staff accountants at a major public accounting firm.Both are pursuing a law degree in a night program at local law school.Madison contends that the cost of the program is a deduction for income tax purposes,while Christopher maintains that it is not.Who is correct and why?

Accepted Answer

Both are partly correct and incorrect.Th...

Question 10

An employee can exclude from gross income the value of meals provided by his or her employer whenever:

Accepted Answer

A)  The meal is not extravagant.
B)  The meals are provided on the employer's premises for the employer's convenience.
C)  There are no places to eat near the work location.
D)  The meals are provided for the convenience of the employee.
E)  None of the above.F) A) and B)
G) A) and D)

Question 11

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

A) True 
 B)False

Question 12

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Accepted Answer

A)  Employees are not subject to the estimated tax payment provisions.
B)  Any penalty imposed for underpayment is deductible for income tax purposes.
C)  Married taxpayers may not make joint estimated tax payments unless they file a joint income tax return.
D)  No quarterly payments are required if the taxpayer's estimated tax is under $1,000.
E)  None of the above.F) B) and E)
G) B) and C)

Question 13

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Accepted Answer

A) True 
 B)False

Question 14

A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction.

Accepted Answer

A) True 
 B)False

Question 15

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees.Which of the following is correct?

Accepted Answer

A)  Heather reduced her salary by $1,200,actually spent $1,500,and received only $1,200 as reimbursement for her medical expenses.Heather's gross income will be reduced by $1,500.
B)  Heather reduced her salary by $1,200,and received only $900 as reimbursement for her actual medical expenses.She is not refunded the $300 remaining balance,but her gross income is reduced by $1,200.
C)  Heather reduced her salary by $1,200,and received only $800 as reimbursement for her medical expenses.She is not refunded the $400.Her gross income is reduced by $800.
D)  Heather reduced her salary by $1,200,and received only $900 as reimbursement for her medical expenses.She forfeits the $300.Her gross income is reduced by $300.
E)  None of the above.F) C) and E)
G) A) and E)

Question 16

The Royal Motor Company manufactures automobiles.Employees of the company can buy a new automobile for Royal's cost plus 2%.The automobiles are sold to dealers at cost plus 20%.Generally,employees of Local Dealer,Inc.,are allowed to buy a new automobile from the company at the dealer's cost.Officers of Local Dealer are allowed to use a company vehicle (for personal use) at no cost.

Accepted Answer

A)  The employees who buy automobiles at a discount are not required to recognize income from the purchase.
B)  None of the employees who take advantage of the fringe benefits described above are required to recognize income.
C)  Employees of Royal are required to recognize as gross income 18% (20% - 2%) of the cost of the automobile purchased.
D)  All employees must recognize gross income from their personal use of the company vehicles.
E)  None of the above.F) All of the above
G) B) and E)

Question 17

For self-employed taxpayers,travel expenses are not subject to the 2%-of-AGI floor.

Accepted Answer

A) True 
 B)False

Question 18

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

Accepted Answer

A) True 
 B)False

Question 19

Travel status requires that the taxpayer be away from home overnight.

Accepted Answer

The answer of Travel status requires that the taxpayer be...

Question 20

In 2015,Kathy receives a $4,000 distribution from her Coverdell Education Savings Account (CESA) ,which has a fair market value of $10,000.Total contributions to her CESA have been $7,000.Kathy's AGI is $25,000.If Kathy uses $3,000 of the $4,000 distribution for qualified education expenses,what amount should she include in her gross income?

Accepted Answer

A)  $0.
B)  $450.
C)  $750.
D)  $1,200.
E)  None of the above.F) A) and E)
G) A) and D)

Exam 17: Individuals As Employees and Proprietors

After the automatic mileage rate has been set by the IRS for a year,it cannot later be changed by the IRS.

Correct Answer
verified

For self-employed taxpayers,travel expenses are not subject to the 2%-of-AGI floor.

Correct Answer
verified

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

Correct Answer
verified

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees.Which of the following is correct?

Correct Answer
verified

Correct Answer
verified

If an individual is ineligible to make a deductible contribution to a traditional IRA,nondeductible contributions of any amount can be made to a traditional IRA.

Correct Answer
verified

Correct Answer
verified
If Sonja returns to the United States,sh...
View Answer

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Correct Answer
verified

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Correct Answer
verified

Aiden performs services for Lucas.Which,if any,of the following factors indicate that Aiden is an employee,rather than an independent contractor?

Correct Answer
verified

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

Correct Answer
verified
She can deduct her moving expe...
View Answer

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.

Correct Answer
verified

A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction.

Correct Answer
verified

Tired of renting,Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire does not qualify as a uniform expense.

Correct Answer
verified

Which,if any,of the following factors is not a characteristic of independent contractor status?

Correct Answer
verified

Employers can provide numerous benefits to their employees and the employees are permitted to exclude the value of these benefits from gross income.What are the effects of the exclusions on:

Correct Answer
verified

An employee can exclude from gross income the value of meals provided by his or her employer whenever:

Correct Answer
verified

Correct Answer
verified
Both are partly correct and incorrect.Th...
View Answer

Correct Answer
verified

Travel status requires that the taxpayer be away from home overnight.

Correct Answer
verified

Exam 17: Individuals As Employees and Proprietors

After the automatic mileage rate has been set by the IRS for a year,it cannot later be changed by the IRS.

Correct AnswerverifiedShow Answer

For self-employed taxpayers,travel expenses are not subject to the 2%-of-AGI floor.

Correct AnswerverifiedShow Answer

Qualifying job search expenses are deductible even if the taxpayer does not change jobs.

Correct AnswerverifiedShow Answer

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees.Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an individual is ineligible to make a deductible contribution to a traditional IRA,nondeductible contributions of any amount can be made to a traditional IRA.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIf Sonja returns to the United States,sh...View AnswerShow Answer

Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan.

Correct AnswerverifiedShow Answer

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Correct AnswerverifiedShow Answer

Aiden performs services for Lucas.Which,if any,of the following factors indicate that Aiden is an employee,rather than an independent contractor?

Correct AnswerverifiedShow Answer

Nicole just retired as a partner in a Philadelphia law firm.She moved to San Francisco where she took a job as an adjunct professor at a local law school.Can Nicole deduct her moving expenses? Explain

Correct AnswerverifiedShe can deduct her moving expe...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

A taxpayer who claims the standard deduction will not be able to claim an office in the home deduction.

Correct AnswerverifiedShow Answer

Tired of renting,Dr.Smith buys the academic robes she will wear at her college's graduation procession.The cost of this attire does not qualify as a uniform expense.

Correct AnswerverifiedShow Answer

Which,if any,of the following factors is not a characteristic of independent contractor status?

Correct AnswerverifiedShow Answer

Employers can provide numerous benefits to their employees and the employees are permitted to exclude the value of these benefits from gross income.What are the effects of the exclusions on:

Correct AnswerverifiedShow Answer

An employee can exclude from gross income the value of meals provided by his or her employer whenever:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBoth are partly correct and incorrect.Th...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Travel status requires that the taxpayer be away from home overnight.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If Sonja returns to the United States,sh...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
She can deduct her moving expe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Both are partly correct and incorrect.Th...
View Answer

Correct Answer
verified

Correct Answer
verified