Question

Taxpayer operates a business as a sole proprietor. During the year, Taxpayer incurred the following expense...

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.

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

Homework Answers

Answer #1

Based on the information available in the question, we can calculate the total business expense deduction as follows:-

Employee Salary - $15,000

Payroll Taxes - $1,500

Lunch with a client (50% deductble - $250 * 50%) - $125

Total Deductible expenses = $16,625

The ticket to superbowl with best client is not deductible as entertainment expenes are no longer deductible. The Contribution to the mayor's re-election campaign is also not deductible as political contributions are not deductible. Further, the cell phone bill of Taxpayer's son who does not work at business does not constitute a valid business expense.

Hence, the total deductible business expense per the calculation above is $16,625.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
10) Taxpayer operates a business as a sole proprietor. During the year, Taxpayer incurred the following...
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...
Rob operates a small plumbing supplies business as a sole proprietor. In 2018, the plumbing business...
Rob operates a small plumbing supplies business as a sole proprietor. In 2018, the plumbing business has gross business income of $421,000 and business expenses of $267,000, including wages paid of $58,000. The business sold some land that had been held for investment generating a long-term capital gain of $15,000. The business has $300,000 of qualified business property in 2018. Rob's wife, Marie, has wage income of $250,000. They jointly sold stocks in 2018 and generated a long-term capital gain...
Case Background A sole proprietor (the owner) has established a service business specializing in recruitment for...
Case Background A sole proprietor (the owner) has established a service business specializing in recruitment for businesses needing specialized Tool Industry staff. The trail balance at the end of the first three months of operations is provided below. Part of the service is to train people before they are placed with companies. The owner has asked, you, the accountant for HR, to prepare the answers to the questions below considering the notes provided. Trial Balance Accounts Debits Credits Cash 24,500...
Case Background A sole proprietor (the owner) has established a service business specializing in recruitment for...
Case Background A sole proprietor (the owner) has established a service business specializing in recruitment for businesses needing specialized Tool Industry staff. The trail balance at the end of the first three months of operations is provided below. Part of the service is to train people before they are placed with companies. The owner has asked, you, the accountant for HR, to prepare the answers to the questions below considering the notes provided. Trial Balance Accounts Debits Credits Cash 24,500...
Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and...
Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6780. Roberta has been divorced from her former husband, Wayne, for three years. She has a son, Jason, who is 17, and a daughter, June, who is 18. Jason's Social Security number is 111-11-1112, and June's is 123-45-6788. Roberta does not want to contribute $3 to the Presidential Election Campaign Fund....
This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives...
This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6780. Roberta has been divorced from her former husband, Wayne, for three years. She has a son, Jason, who is 17, and a daughter, June, who is 18. Jason's Social Security number is 111-11-1112, and June's is 123-45-6788. Roberta does not want to contribute $3 to the Presidential Election Campaign Fund. Roberta,...
Tax Return Project James A. Varney and Denise M. Varney James and Denise Varney are married...
Tax Return Project James A. Varney and Denise M. Varney James and Denise Varney are married and file a joint return. James is 48 years of age and Denise is 49. James is employed full-time as an electrical engineer for Livingston Unitech Corporation, Ltd. Denise is a self-employed design consultant. They have two children, Pamela and Vernon, who live at home and receive all of their support from their parents. Pamela is 20 years old and attended college on a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT