Swft12 - Individual Income Taxes, 35e Test Bank

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1028. One indicia of independent contractor (rather than employee) status is when the individual performing the services is paid based on tasks performed (rather than time spent).

*a. True
b. False

1029. In some cases it may be appropriate for a taxpayer to report work-related expenses by using both Form 2106 and Schedule C.

*a. True
b. False

1030. The IRS will issue advanced rulings as to whether a worker’s status is that of an employee or an independent contractor.

*a. True
b. False

1031. Jake performs services for Maude. If Maude provides Jake with a helper and tools, this is indicative of independent contractor (rather than employee) status.

a. True
*b. False

1032. A statutory employee is not a common law employee but is subject to income tax withholdings.

a. True
*b. False

1033. For tax purposes, a statutory employee is not treated the same as a common law employee.

*a. True
b. False

1034. 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 not exist.

*a. True
b. False

1035. The work-related expenses of an independent contractor will be subject to the 2%-of-AGI floor.

a. True
*b. False

1036. 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 home and second job.

a. True
*b. False

1037. After the automatic mileage rate has been set by the IRS for a year, it cannot later be changed by the IRS.

a. True
*b. False

1038. 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

1039. 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

1040. A deduction for parking and other traffic violations is allowed under the actual cost method but not the automatic mileage method.

a. True
*b. False

1041. Once the actual cost method is used, a taxpayer cannot change to the automatic mileage method in a later year.

a. True
*b. False

1042. For tax purposes, “travel” is a broader classification than “transportation.”

*a. True
b. False

1043. 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 was away from home.

a. True
*b. False

1044. Janet, who lives and works in Newark, travels to Atlanta for a Thursday-Friday business conference. She stays over after the conference and visits relatives and friends on Saturday. Under certain circumstances, the meals and lodging expenses for Saturday can be considered as business related.

*a. True
b. False

1045. Marvin lives with his family in Alabama. He has two jobs: one in Alabama and one in North Carolina. Marvin’s tax home is where he lives (Alabama).

a. True
*b. False

1046. A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip. While in Chicago, taxpayer uses the hotel valet service to have some laundry done. The valet charge is a deductible travel expense.

*a. True
b. False

1047. The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.

*a. True
b. False

1048. A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on business and two days are spent on visiting relatives, only 60% of the airfare is deductible.

a. True
*b. False

1049. Bob lives and works in Newark, NJ. He travels to London for a three-day business meeting, after which he spends three days touring Scotland. All of his air fare is deductible.

*a. True
b. False

1050. Edna lives and works...
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