I thought we’d have a little fun this month. I’m giving you a POP quiz on all things taxes. The answers are at the bottom of the newsletter, so don’t scroll down until you grab a pen and paper and try to answer these questions.
Have fun!
Wait…I can’t deduct that!?
This Wasn’t the Plan…But I’m So Glad it Happened
January 26, 2017
What do Business Meetings, an Astrologer, the Beach, and Dog-sledding Have in Common?
March 28, 2017Tax Pop Quiz
1. If you buy dinner for your friend and you discuss business at the table you can:
a. Deduct the entire meal as a business expense
b. Deduct only your meal as a business expense
c. Not deduct this because it wasn’t a business meeting
2. You drive from your home to your office, then to a client’s location. You can:
a. Deduct the entire round trip from your home, to the office and to the client
b. Deduct only the mileage from the office to the client and back to the office
c. Take no deduction
3. You attend a business conference in San Diego for three days and visit friends in the same town for two additional days. You can:
a. Deduct the entire trip, including airfare, lodging and all meals
b. Deduct just the business portion of the trip, airfare, lodging for four days and meals for the business portion
c. Take no deduction because you also had a personal purpose
4. You have emergency surgery during the year. You can:
a. Deduct the total amount you paid
b. Take a partial deduction, if and only if the total medical expenses are greater than the threshold, per the IRS
c. Do nothing because medical expenses are not deductible
5. You have a home office. Your electric bill is deductible as part of the home office as follows:
a. If you use the actual method for calculating the home office deduction, the entire electric bill is deductible
b. If you use the $5/square foot per year method, there is no additional deduction related to the electric bill
c. You have no deduction because the electric bill is a personal expense
6. You lease a car. You use the car 40% of the time for business. The lease is deductible as a business expense as follows:
a. The full value of the lease is deductible as a business expense
b. You take the mileage method for calculating the deduction and the lease is added to that
c. Based on actual expenses, you get the deduction only for the business portion of the lease (40%)
Answers:
1…C
Your friend is not a business colleague or prospective client so you cannot deduct this meal as a business expense.
2…B
You cannot deduct commuting expenses to the office, only to the client’s location.
3…B
You can only deduct the business portion of the trip.
4…B
Medical expenses are deductible for the extent they exceed 10% of your Adjusted Gross Income.
5…B
Using the $5 per square foot method includes utilities, such as electricity.
6…C
When using the actual expense methodology, only the business portion is deductible.
Monthly Workshops:
Did you know I hold a monthly workshop at Headroom? It would be great to see you there. I cover juicy financial topics every month like budgeting, expenses, taxes and a lot more. To see all topics for the year, click the button below.
