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    Employee Business Expenses and AGI Limit

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    Sarah incurred employee business expenses of $5,000 consisting of $3,000 business meals and $2,000 customer entertainment. She provided an adequate accounting to her employer's accountable plan and received reimbursement for one-half of the total expenses. How much of the meals and entertainment will be deductible by Sarah without consideration of the 2% of AGI limit?

    A. $0
    B. $1,250
    C. $2,500
    D. $5,000.

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    Solution Summary

    This solution provides the correct answer with calculation and explanation to the employee business expenses question presented. The applicable tax law is referenced. Note that this question specifically asks for the answer without considering 2% of AGI.