Kate works for a company that has an accountable reimbursement plans for busines
ID: 2590964 • Letter: K
Question
Kate works for a company that has an accountable reimbursement plans for business expenses. During the year, Kate had the following substantiated business expenses: Travel Expenses:2,100, Parking fee:200, Meals and entertainment: 600, Miscellaneous expenses: 100. Kate drove her own car 20,000 miles, of which 10,000 were work-related. Kate uses the standard mileage rate (.575 per mile) to determine her care expenses deduction. Kate received a 5,000 business travel expense reimbursement from her employer, none of which was for meals or entertainment. Kate's AGI is 100,000. What's the amount of Kate's total business expenses? (ignore the AGI floor) What's the amount of Kate's total business expense deduction after the 2% AGI floor is applied?
Explanation / Answer
Non Reimbursed expenses
Total expenses for business- reimbusrsed expenses by employer
2100+200+600+100+ 5750 (10,000 X 0.575) - 5000
business expense without AGI limit= 3,750
AGI 100,000
limit of 2% AGI or 2,000
3750-2000
business expense after AGI limit = 1,750
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