Mr. Tib is employed by RQA Inc. This year, Mr. Tib incurred $3,160 of employment-related entertainment expenses and $4,750 of employment-related moving expenses. Mr. Tib’s AGI before consideration of these expenses was $61,000, he itemizes deductions, and his marginal tax rate is 25 percent. In each of the following cases, determine Mr. Tib’s after-tax cost of the $7,910 total expenses.
a. RQA reimbursed him for both the entertainment expense and the moving expense.
b. RQA reimbursed him for $1,500 of the entertainment expense and $4,000 of the moving expense.
c. RQA didn’t reimburse him for any of the expenses.