Question

Clem is married and is a skilled carpenter. Clem’s wife, Wanda, works part-time as a substitute grade school teacher. Determine the amount of Clem’s expenses that are deductible for AGI this year (if any) under the following independent circumstances:___________a) Clem is self-employed and this year he incurred $525 in expenses for tools and supplies related to his job. Since neither were covered by a qualified health plan, Wanda paid health insurance premiums of $3,600 to provide coverage for herself and Clem (not through an exchange).b) Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,250 in utilities and $780 in depreciation.c) Clem paid self-employment tax of $15,300 (the employer portion is $7,650), and Wanda had $3,000 of Social Security taxes withheld from her pay.d) Clem paid $45 to rent a safe deposit box to store his coin collection. Clem has collected coins intermittently since he was a boy, and he expects to sell his collection when he retires.

Answer 1

A. $4,125

B. $2030

C. $9650

D. $0

Step-by-step explanation:

Calculation to determine the amount of Clem’s expenses that are deductible for AGI this year

A. AGI=Tools and supplies + Health insurance

AGI=$525+$3600

AGI=$4125

Therefore the amount of Clem’s expenses that are deductible for AGI this year is $4125

B. AGI=Tools and supplies +Health insurance ar

AGI=$1,250 +$780

AGI=$2030

Therefore the amount of Clem’s expenses that are deductible for AGI this year is $2030

C. Based on the information given, the EMPLOYER PORTION of the amount of $7,650 will be the EMPLOYER PORTION of the self-employment tax is deductible.

D. Based on the information given The amount of Clem’s expenses that are deductible for AGI this year is $0 reason been that The safe deposit fee is an ITEMIZED DEDUCTION .