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Monique travel & entertainment: for AGI or from AGI

Monique is a self-employed manufacturer's representative who solicits business for clients and receives a commission based on sales. She incurs the following expenditures during the current year:

Airfare and lodging while away from home overnight $ 4,000
Business meals while traveling at which business is discussed 1,000
Local transportation costs for automobile,parking, tolls, etc. (business-related) 2,000
Commuting expenses 1,000
Local entertainment of customers 2,000
Total: 10,000

a. Which of the expenditures listed above (if any) are deductible by Monique?
b. Are each of these items classified as for AGI or from AGI deductions?
c. How would your answers to Parts a and b change if Monique were an employee rather than self-employed and none of the expenses were reimbursed by her employer?

Solution Preview

a. As a self employed person, Monique will report her earnings and expenses on Schedule C. The deductible expenses are:

Airfare and lodging while away from home overnight = $4,000
Business meals while traveling at which business is discussed 1,000 x 50% = $500
Local transportation costs for automobile, parking, tolls, etc. (business-related) = ...

Solution Summary

The solution clearly explains the difference in the type of expenses allowable for AGI and from AGI. Non-deductible or limited deductions are also shown.

$2.19