CHAPTER 9 DEDUCTIONS: EMPLOYEE AND SELF-EMPLOYED-RELATED EXPENSES

1. One indicia of
independent contractor (rather than employee) status is when the individual
performing the services is paid based on time spent (rather than on tasks
performed).
a. True
b. False

2. In some cases it may
be appropriate for a taxpayer to report work-related expenses by using bothForm 2106 and Schedule C.
a. True
b. False

3. The IRS willissue advanced rulings as to
whether a worker’s status is that of an employee or an independent contractor.
a. True
b. False

4. Jake performs
services for Maude. If Maude provides the helper and tools, this is indicative
of independent contractor (rather than employee) status.
a. True
b. False

5. A statutory employee
is not a common law employee but is subject to Social Security tax.
a. True
b. False

6. For tax purposes, a
statutory employee is treated the same as a common law employee.
a. True
b. False

7. If an individual is
subject to the direction or control of another only to the extent of the end
result but not as to the means of accomplishment, an employer-employee
relationship does notexist.
a. True
b. False

8. The work-related
expenses of an independent contractor will
be subject to the 2%-of-AGI floor.
a. True
b. False

9. After she finishes
working at her main job, Ann returns home, has dinner, then drives to her
second job. Ann may deduct the mileage between her first and second job.
a. True
b. False

10.A taxpayer who
maintains an office in the home to conduct his only business will not have
nondeductible commuting expense.
a. True
b. False

11.After the automatic
mileage rate has been set by the IRS for a year, it cannotlater be changed by the IRS.
a. True
b. False

.

12.In choosing between
the actual expense method and the automatic mileage method, a taxpayer should
consider the cost of insurance on the automobile.
a. True
b. False

13.A taxpayer who uses
the automatic mileage method to compute auto expenses can also deduct the
business portion of tolls and parking.
a. True
b. False

14.A deduction for
parking and other traffic violations incurred during business use of the
automobile is allowed under the actual cost method but not the automatic
mileage method.
a. True
b. False

15.A taxpayer who uses
the automatic mileage method for the business use of an automobile can change
to the actual cost method in a later year.
a. True
b. False

16.Once the actual cost
method is used, a taxpayer cannotchange
to the automatic mileage method in a later year.
a. True
b. False

17.For tax purposes,
“travel” is a broader classification than “transportation.”
a. True
b. False

18.Amy lives and works
in St. Louis. In the morning she flies to Boston, has a three-hour business
meeting, and returns to St. Louis that evening. For tax purposes, Amy wasaway from home.
a. True
b. False