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: (Leave no answer blank. Enter zero if applicable.)  

a. Clem is self-employed and this year he incurred $705 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 $6,000 to provide coverage for herself and Clem (not through an exchange).
Deductible amount for AGI:

b. Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred expenses of $1,730 in utilities and $990 in depreciation.
Deductible amount for AGI:

c. Clem paid self-employment tax of $24,200 (the employer portion is $12,100), and Wanda had $7,700 of Social Security taxes withheld from her pay.
Deductible amount for AGI:

d.  Clem paid $69 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.
Deductible for AGI:

Answer 1

a. $ 6,705

The tools and supplies and the health insurance are deductible for AGI.

b. $ 2,720

The utilities and depreciation are deductible for AGI (being a rental activity).

c. $ 12,100

The employer portion of the self-employment tax is deductible for AGI but the social security tax is not deductible.

d. $ 0

The safe deposit box fee is an itemized deduction as it appears that Clem is investing in coins rather than dealing in them.