Question

Which of the following is a true statement?

A. Employees cannot claim business expense deductions.

B. Employees can claim business expense deductions for AGI.

C. Employees can claim business expense deductions as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.

D. Employees can claim business expense deductions as miscellaneous itemized deductions subject to the 2 percent of AGI limitation.

E. None of these is true.

Answer 1

Employees can claim business expense deductions as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.

Step-by-step explanation:

The true statement among the options provided is C. Employees can claim business expense deductions as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.

Business expense deductions are expenses that employees can deduct on their tax returns. These deductions are reported as miscellaneous itemized deductions on Schedule A of the tax return. Prior to the Tax Cuts and Jobs Act of 2017, employees were allowed to claim miscellaneous itemized deductions subject to the 2 percent of AGI limitation. However, under the new tax law, these deductions are no longer available for tax years 2018 through 2025.

Therefore, employees can still claim business expense deductions, but they are now reported as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.