Mike, a self-employed consultant, incurs the following business-related expenses in 2020: Actual automobile expenses Moving expenses Entertainment expenses Travel expenses (including $500 of business meals) Professional dues and subscriptions Total $ 2,500 4,000 1,500 2,500 500 $ 11,000 Mike earned $130,000 of gross income from his consulting business and had $12,000 of interest and dividend income in 2020 before any of the above expenses are deducted. He has $20,000 of itemized deductions. Mike is married and files a joint return with his wife, Ann, who has no income. a. What is the amount of Mike's deduction for business-related expenses for 2020? b. What is Mike and Ann's AGI and taxable income in 2020, assuming he is married and files a joint return, and ignoring the self-employment tax?
Mike, a self-employed consultant, incurs the following business-related expenses in 2020: Actual automobile expenses Moving expenses Entertainment expenses Travel expenses (including $500 of business meals) Professional dues and subscriptions Total $ 2,500 4,000 1,500 2,500 500 $ 11,000 Mike earned $130,000 of gross income from his consulting business and had $12,000 of interest and dividend income in 2020 before any of the above expenses are deducted. He has $20,000 of itemized deductions. Mike is married and files a joint return with his wife, Ann, who has no income. a. What is the amount of Mike's deduction for business-related expenses for 2020? b. What is Mike and Ann's AGI and taxable income in 2020, assuming he is married and files a joint return, and ignoring the self-employment tax?
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