Toby,a Single Taxpayer with No Dependents,is an Employee of a Large

question 97

Multiple Choice

Toby,a single taxpayer with no dependents,is an employee of a large consulting firm.During the year he incurs the following business expenses that are not reimbursed by his employer:

$$\begin{array} { lr } \text { Business entertainment and other meals } &\$ 3,400 \\ \text { Transportation and lodging } &4,200\end{array}$$

Toby's AGI is $100,000 and is in the 28% marginal tax rate.In addition to the expenditures described above,his only other qualified itemized deductions are home mortgage interest of $6,000 and property taxes of $2,000.What is the after-tax cost to Toby of his unreimbursed employee business expenses?

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Definitions:

Owner's Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, reflecting the ownership interest in the company.

Cash

Currency and other liquid instruments that are used to conduct transactions or settle debts.

Accounts Receivable

Funds that customers owe to a company for products or services already provided but not yet compensated for.

Accounts Payable

A bookkeeping record indicating a business's duty to settle a short-term financial debt with its lenders or vendors.