54. In June 2018, Rick moved from Norfolk, Virginia, where he was stationed in the military, to Los Angeles, California, his new base. He drove his car from Norfolk, Virginia to Los Angeles, California. The total mileage is 3,250 miles. He paid $180 for parking and tolls, $680 for lodging, and $300 for meals during the trip. What amount of the moving expenses can Rick deduct as an adjustment to income on his 2018 tax return if he chooses to use the standard mileage rate?

a) $1,745

b) $1,445

c) $1,595

d) $1,260

55. Jake is a self-employed carpenter. Last year his net self-employment income was $25,200. How much would Jakes self-employment tax be on line 57 of Schedule 4 (Form 1040)?

a) $1,781

b) $3,561

c) $1,928

d) $3,856

56. Sylvia graduated from college last year and started repaying her student loans. She received a statement from the bank showing she paid $2,750 in interest on her student loans for the year. Her total income before adjustments is $38,500, and she meets all requirements to be able to deduct the interest. How much, if any, will Sylvia be allowed to deduct as an adjustment to her income?

a) $ 0

b) $1,375

c) $2,500

d) $2,750

57. Joseph cashed in a CD (certificate of deposit) early because he needed money quickly to buy a new car. Unfortunately, the bank charged him an early withdrawal penalty of 5% which amounted to $250. Can Joseph deduct the penalty on his taxes and, if so, how much can be deducted?

a) No, Joseph will not be allowed to deduct any of the early withdrawal penalty.

b) Yes, but Joseph can only deduct the early withdrawal penalty if he uses Schedule A and itemizes his deductions.

c) Yes, but only half of the early withdrawal penalty may be deducted.

d) Yes, Joseph can deduct $250 on line 30 of Schedule 1 (Form 1040) as an adjustment to income.

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