Shelley Is Employed in Texas and Recently Attended a Two-Day

question 16

Multiple Choice

Shelley is employed in Texas and recently attended a two-day business conference in New Jersey.Shelley spent the entire time at the conference and documented her expenditures (described below) .What amount can Shelley deduct as an employee business expense (before considering any miscellaneous itemized deduction limitations) ? Alrfare to New Jer'sey                                                $2,000
Meals                                                                            220
Lodging in New Jersey                                                  450
Rental car                                                                      180

• A) $2,850
• B) $2,740
• C) $1,850 if Shelley's AGI is $50,000
• D) All of the expenses are deductible if Shelley is reimbursed under an accountable plan.
• E) None of the expenses are deductible - only employers can deduct travel expenses.

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Definitions:

Arthur Laffer

Arthur Laffer is an economist known for the Laffer Curve, which posits that there is an optimal tax rate that maximizes revenue without discouraging economic activity.

Tax Revenues

The proceeds that governments secure by enacting taxes.

Tax

A financial charge or levy imposed by a government on individuals or entities, primarily used to fund public expenditures.

Deadweight Loss

Economic inefficiency created by a divergence from the optimal market equilibrium, often caused by taxes, subsidies, or other market interventions.