Question

Problem 3-11 Travel Expenses, Educational Expenses (LO 3.4, 3.6) Bob is a self-employed lawyer and is required to take a week continuing legal education every year to maintain his license. This year he paid $1,150 in course fees for his continuing legal education in a different city. He also paid $354 for airfare and a hotel room and paid $234 for meals. What is the total amount he can deduct on his Schedule C related to these expenses? $ X Feedback Check My Work Travel expenses are defined as ordinary and necessary expenses incurred in traveling away from home in pursuit of the taxpayer's trade or business. These expenses are deductible as long as they can be substantiated and are not lavish or extravagant. Expenses included as part of the travel deduction include the cost of such items as meals, lodging, taxis, tips, and laundry. Most travel expenses are fully deductible, but Congress decided that a portion of the cost of meals is a personal expense. Therefore, only 50 percent of the cost of meals is deductible. There are two tests related to the deduction of educational expenses, at least one of which must be met to deduct the expenses. Educational expenses are not deductible, even if one of the tests is met, if (1) the education is required to meet the minimum requirements for the taxpayer's current job, or (2) the education is part of a program that will lead to a new trade or business even if the taxpayer does not intend to enter that new trade or business.

Answer 1

Answer-

Total Amount Mr.Bob can deduct on his Schedule C related expenses

Travel,meals and Couse Fees

a.Mr Bob can deduct half of his meal expenditure while on business trip.

so amount deductable=$234*50%=$117

b.Mr Bob can deduct full expenditure on air fare on a business trip

so amount deductable=$354*100%=$354

c.Mr Bob is allowed to write off legal fees and professional services you pay for,along with any licenses you need to run the business.

Considering fee paid to attend course is essential for running the business,such expenditure is deductable.

so amount deductable =$1150*100%=$1150

Total Deductable expenditure under schedule C = 117+354+1150=$1621

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