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27 August, 12:30

In 2019, Robert entertains four key clients and their spouses at a nightclub. Business discussions occurred over dinner and prior to the entertainment beginning. Expenses were $285 (limo charge), $125 (cover charge), $1,190 (drinks and dinner), and $238 (tips to servers). If Robert is self-employed, how much can he deduct for this event?

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  1. 27 August, 15:18
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    Total deduction = $680

    Explanation:

    Deductions:

    Deductions are a source of revenues and expenses that a person can deduct from the annual gross income before calculating the annual gross income. after deductions, the taxable income gets reduced which ultimately results in fewer taxes.

    Answer and Explanation:

    Calculate the amount of deduction as shown below:

    Details Amount

    Limo charges $200

    Add: Cover charge (50% cutback adjustment)

    ($120*50%) $60

    Add: Drinks and Dinner (50% cutback adjustment)

    ($700*50%) $350

    Add: Tips to servers (50% cutback adjustment)

    ($140*50%) $70

    Total deduction $680
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