Gunnar B$.($age $42)$ and Hannah R$.($age $48)$ Ferguson are married and live at $5944$ Overhill Road, Council Bluffs, IA $51503($a suburb of Omaha$).$ Gunnar is a chemist employed by BAC Pharmaceuticals, Inc., and Hannah is a self$-$employed doctor of anesthesiology. They are calendar$-$year, cash$-$basis taxpayers.

BAC Pharmaceuticals develops and produces injectable medicines used in chemotherapy treatments for cancer patients. Gunnar$$s Form W$2$ from BAC reports taxable wages of $$91,180$ which is comprised of the following items. Gunnar manages the Omaha facility for an annual salary of $$95,000.$ BAC makes contributions to a qualified defined contribution pension plan for all its full$-$time employees which are not included in current compensation. Although Gunnar could make contributions into the plan, he chose not to do so in $2022.$ Gunnar participates in his employer$$s group health insurance plan to which he contributed $$4,000$ in $2022$ for medical coverage. These contributions are made with pre$-$tax dollars, so his taxable salary is reduced by $$4,000.$ The health plan covers Gunnar, Hannah, and their two dependent children. Because of the risk associated with Gunnar$$s work $($i$.$e$.,$ processing of chemotherapy drugs$),$ BAC provides all its employees with $$200,000$ of group term life insurance coverage. An additional $$180$ of income is included in Gunnar$$s Form W$2$ to report the taxable value of this insurance. Gunnar$$s Form W$2$ from BAC also reflects income tax withholding of $$6,500$ for Federal income taxes and $$4,000$ for state of Iowa income taxes.

BAC generally reimburses Gunnar for expenses related to his work for the company. However, as a matter of policy, BAC does not reimburse for the following:

Monthly dinner meetings of the Midwestern Chemists Association $($MCA$)$ $$825$

Dues to professional organizations $240$

Subscriptions to professional journals $180$

MIA correspondence study course $230$

Gunnar attended $11$ MCA dinner meetings in $2022.$ The cost of each dinner included the following: $$40$ fee for speaker, $$25$ price of meal, and $$10$ parking fee. Gunnar goes to the meetings from work and returns home the same night. The Management Institute of America $($MIA$)$ charge was for an online home study course on ways to improve safety measures and avoid accidents in the industrial workplace.