2% AGI (Misc Deductions)

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  • May 28, 2015 at 5:39 pm #194374
    MaLoTu
    Participant

    I have transportation expenses and meals and entertainment expenses listed under the 2%AGI rule, but it also states in the book transportation is 100% deductible and meals and entertainment are 50% deductible. Does the 2% AGI still apply to these? I may have written the wrong note on the page …

    Almost always from my phone... please excuse my typos!

    All 4 passed - 2016

    CA CPA

Viewing 9 replies - 1 through 9 (of 9 total)
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  • May 28, 2015 at 5:45 pm #667721
    taxgeek83
    Participant

    Are you thinking of unreimbursed employee business expenses? Check out Form 2106 & the instructions. Those expenses are subject to the 2% AGI limitation.

    For a normal Sch C/F business, transportation is 100% and meals/entertainment are 50%.

    May 28, 2015 at 5:51 pm #667722
    MaLoTu
    Participant

    Becker kind of mixed them all together! I don't know if you used Becker or not, but it starts talking about Misc. deductions subject to the 2% AGI which is unreimbursed business expenses & travel, meals, and lodging for “away from home” travel. The in what can be construed as the same thought goes on transportation expenses and meals/entertainment expense without clarifying.

    So, the transportation and meals/entertainment are not subject to the 2%, but can be 100%/50% deducted (respectively)?

    Almost always from my phone... please excuse my typos!

    All 4 passed - 2016

    CA CPA

    May 28, 2015 at 6:28 pm #667723
    No_one
    Member

    as per my understanding you have to first limit them 50% (total expense) and than in excess of 2% AGI. I did becker test yesterday that helped me learn this thing..So far i was just limiting it to 2% or 50% and mixing them..but now as per becker its first 50% limit and than compare to 2% AGI..

    I hope this helps..

    CA Candidate
    FAR: You are down...
    Aud: Surprised me...Thanks
    BEC: 75% work done
    REG: It's 80 but I am 100% done 🙂

    May 28, 2015 at 6:38 pm #667724
    MaLoTu
    Participant

    so, it is in excess of 2% AGI up to 50% of the total expenses?

    I did the test yesterday too and realized I really needed to brush up on arriving at AGI and itemized deductions and limits … blah. I cannot wait until I am done with REG (well of the exams really, lol).

    Almost always from my phone... please excuse my typos!

    All 4 passed - 2016

    CA CPA

    May 28, 2015 at 7:08 pm #667725
    taxgeek83
    Participant

    No_one is right – Apply the 50% limitation and then the 2% limitation if it's a 2106 expense. Try this:

    https://www.irs.gov/publications/p529/ar02.html#en_US_2014_publink100026912

    May 28, 2015 at 7:13 pm #667726
    MaLoTu
    Participant

    okay, so the excess of 50% of the expenses over 2% of the AGI … I am pretty sure I got it now.

    Thanks!

    Almost always from my phone... please excuse my typos!

    All 4 passed - 2016

    CA CPA

    May 28, 2015 at 8:23 pm #667727
    No_one
    Member

    Malotu That exam kicked me and I am in panic mode..excessive panic mode..I am sitting tomorrow…And I felt exactly I dont know what include before AGI after AGI and I freaked out…

    Between hw much u scored on that?

    CA Candidate
    FAR: You are down...
    Aud: Surprised me...Thanks
    BEC: 75% work done
    REG: It's 80 but I am 100% done 🙂

    May 28, 2015 at 8:29 pm #667728
    MaLoTu
    Participant

    I got:

    T1 – 65

    T2 – 75

    T3 – 65

    I didn't focus too much on the SIMS, but I did look at them … I know they aren't going to be that easy on the test!

    I wish Becker would put the level of difficulty for each question so we can gauge how well we are doing. If I got 65% and answered most of the difficult ones right, then I would feel better …

    Almost always from my phone... please excuse my typos!

    All 4 passed - 2016

    CA CPA

    May 28, 2015 at 10:23 pm #667729
    taxgeek83
    Participant

    Might be short notice, but if you're confused on the before/after AGI, take a quick look at a 1040. AGI line is at the bottom of the first page – everything above that is used to arrive at AGI; everything on the second page is subtracted from AGI to arrive at taxable income.

    Hope that helps.

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