Questions: Andy operates a shoe-shining business as a sole proprietorship, and he also collects a salary from another employer. During 2022, Andy paid a total 2,000 in tax preparation fees, of which 1,500 was related to his shoe-shining business. How much of these costs can Andy deduct in 2022? 0. Tax preparation fees are not deductible. 1,500 as a FOR AGI deduction. 1,500 as a FROM AGI deduction. 2,000 as a FROM AGI deduction.

Andy operates a shoe-shining business as a sole proprietorship, and he also collects a salary from another employer. During 2022, Andy paid a total 2,000 in tax preparation fees, of which 1,500 was related to his shoe-shining business. How much of these costs can Andy deduct in 2022? 0. Tax preparation fees are not deductible. 1,500 as a FOR AGI deduction. 1,500 as a FROM AGI deduction. 2,000 as a FROM AGI deduction.
Transcript text: Andy operates a shoe-shining business as a sole proprietorship, and he also collects a salary from another employer. During 2022, Andy paid a total $\$ 2,000$ in tax preparation fees, of which $\$ 1,500$ was related to his shoe-shining business. How much of these costs can Andy deduct in 2022 ? \$0. Tax preparation fees are not deductible. $\$ 1,500$ as a FOR AGI deduction. $\$ 1,500$ as a FROM AGI deduction. $\$ 2,000$ as a $F R O M$ AGI deduction.
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Solution

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The answer is the second one: $1,500 as a FOR AGI deduction.

Explanation for each option:

  1. \$0. Tax preparation fees are not deductible.

    • This is incorrect. Tax preparation fees related to a business are deductible.

  2. \$1,500 as a FOR AGI deduction.

    • This is correct. The $1,500 related to Andy's shoe-shining business can be deducted as a business expense, which is a deduction for AGI (Adjusted Gross Income).

  3. \$1,500 as a FROM AGI deduction.

    • This is incorrect. Business-related tax preparation fees are deducted for AGI, not from AGI.

  4. \$2,000 as a FROM AGI deduction.

    • This is incorrect. Only the portion of the tax preparation fees related to the business ($1,500) is deductible, and it is deducted for AGI, not from AGI.

Summary: Andy can deduct $1,500 of the tax preparation fees as a FOR AGI deduction in 2022, as this amount is related to his shoe-shining business.

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