Question

Judy is a self-employed musician who performs for a variety of events. This year Judy was fined $265 by the city for violating the city's noise ordinance with a relatively loud performance. As a consequence, Judy contributed $970 to a campaign committee formed to recall the city's mayor. Judy normaly hires three part-time employees to help her schedule events and transport equipment. Judy paid a total of $33,300 to her employees through June of this year. In June Judy fired her part-time employees and hired her husband to replace them. However, Judy paid him $54,700 rather than $33,300 Judy is on the cash method and calendar year, and she wants to know what amount of these expenditures is deductible as business expenses. 59:09 Essay Toobar navigation E EE A A BIUS

Answer 1

Answer -

Step- ( 1 ) - Facts of the case given -

Judy is a self employed musician who performs for a variety of events. This year Judy was fined $265 by the city for violating the city's noise ordinance with a relatively loud performance. As a consequence Judy contributed $970 to a campaign committee formed to recall the city's mayor.

Judy normally hires three part-time employees to help her schedule events and transport equipment. Judy paid a total of $33300 to her employees through June of this year.

In June Judy fired her part-time employees and hired her husband to replace them. However, Judy paid him $54700 rather than $33300.

.

Step- ( 2 ) - Calculation of Amount of Deductible Business Expenses -

	Particulars	Remarks	Deductible Business Expenses
1.	Judy was fined $265 by the city for violating the city's noise ordinance with a relatively loud performance. As a consequence Judy contributed $970 to a campaign committee formed to recall the city's mayor.	The fine and political contribution are not deductible as against public policy	0
2.	Judy paid a total of $33300 to her employees through June of this year.	The compensation of $33300 for the part-time employees is deductible	$33300
3.	In June Judy fired her part-time employees and hired her husband to replace them. However, Judy paid him $54700 rather than $33300.	Wages paid to her husband of $33300 would also be deductible. However, the additional wages of $21400 would appear to be excessive and therefore not deductible.	$33300
Total Amount of Deductible Business Expenses			$66600