Under the Deemed Substantiation Method of Accounting for Expenses, What

question 32

Multiple Choice

Under the deemed substantiation method of accounting for expenses, what is the maximum amount taxpayers are allowed as a deduction without being required to substantiate the amount of the expenses?

• A) The appropriate Federal per diem amount.
• B) $75 per day.
• C) All expenses up to $25 per day.
• D) The per diem rate established by the state in which they live.
• E) None of the above.

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Definitions:

FICA-OASDI Tax

Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance tax; a payroll tax that funds Social Security and Medicare in the United States.

FICA-Medicare Tax

A payroll tax deducted from employee wages and paid by both employees and employers to fund Medicare.

Federal Income Tax

A tax levied by the federal government on yearly income earned by individuals, businesses, and other organizations.

Workers' Compensation

An insurance program that provides benefits to employees who suffer job-related injuries or illnesses.