Question

10)

Taxpayer operates a business as a sole proprietor. During the year, Taxpayer incurred the following expense in operating that business. Determine the total business expense deduction to which Taxpayer is entitled after all applicable limitations.

FOR THE TAX YEAR 2019

• Employee salary - $15,000
• Payroll taxes - $1,500
• Lunch with a client - $250
• Ticket to Superbowl with best client - $3,500
• Contribution to the mayor's re-election campaign - $500
• Cell phone bill of Taxpayer's son, who does not work at business - $750

ENTER ANSWER:

Answer 1

Nature of expenses	Deductible/ Not deductible	% of deduction	Total eligible deduction
Employee salary - $15,000	Full Deductible	100%	$15000
Payroll taxes - $1,500(Assumed to be paid)	Deductible if Paid	100% deductible if Paid	$1500
Lunch with a client - $250	Partial Deductible	50% deductioon on Business meal with client	$125
Ticket to Superbowl with best client - $3,500	Not Deductible	0% deduction on Client Entertaining	0
Contribution to the mayor's re-election campaign - $500	Not deductible	0% deduction on contribution for political campaign	0
Cell phone bill of Taxpayer's son, who does not work at business - $750	Not deductible	0% deduction on Personal Expenses	0
Total Deduction			$16625