Maxine incurs the following employment-related business expenses in the current year:
Professional dues and subscriptions ……………………………………. $1,000
Airfare and lodging …………………………………………………….. 2,000
Local transportation for employment- related business activities ………. 1,000
Customer entertainment (business lunches where business is discussed)……1,000
Total ………………………………………………………………………..$5,000
After making an adequate accounting of the expenses, Maxine receives a reimbursement of $3,000 from her employer. Assume that Maxine’s AGI is $60,000, she has other miscellaneous itemized deductions of $1,000 and she does not use the standard deduction.
a. What amount of the expenses are deductible by Maxine?
b. Are each of these expenditures classified as for AGI or from AGI deductions?
c. How would your answers to Parts a and b change if Maxine instead received a $6,000 reimbursement?