Asked by Itzamar Gutierrez on May 14, 2024
Verified
Flo and Artis (wife and husband) are itemizing their Schedule A expenses on their tax year 2016 return.Artis traveled to Japan for his employer,but was not reimbursed.His meal expenses totaled $500.How much can Artis deduct for meals before applying the 2% of AGI limitation?
A) $500.
B) $250.
C) $150.
D) $0.
Schedule A
A form used in the U.S. to itemize deductions on an individual's federal tax return.
AGI Limitation
Refers to the limits placed on certain tax benefits or deductions that are based on the taxpayer's Adjusted Gross Income (AGI), restricting eligibility or the extent of benefits based on AGI.
Reimbursed
Reimbursed refers to the act of repaying someone for expenses they have incurred, often related to their employment or agreed upon activities.
- Understand the general principles for itemizing deductions on federal income tax returns.
Verified Answer
In this case, Artis' meal expenses were $500. Since $500 is less than $1,000, Artis cannot deduct any part of his meal expenses on this year's tax return. So the correct answer is D) $0.
However, if Artis had other miscellaneous expenses that he was itemizing, and those expenses combined with his meal expenses exceeded $1,000, then he could deduct the portion of his meal expenses that exceeded $1,000. In that scenario, Artis could deduct $250, which is the amount by which his meal expenses exceed the 2% of AGI limitation.
Learning Objectives
- Understand the general principles for itemizing deductions on federal income tax returns.
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