Assume Rita’s consulting business generated $13,000 in gross income for the current year. Further, assume Rita uses the actual expense method for computing her home office expense deduction.

a) What is Rita’s home office deduction for the current year?

b) What is Rita’s AGI for the year?

c) Assume the original facts, except that Rita is an employee and not self-employed.

(She uses the home office for the convenience of her employer.)

Consequently, she does not receive any gross income from the (sole proprietorship)

business and she does not incur any business expenses unrelated to the home office. Finally, her AGI is $60,000 consisting of salary from her work as an employee. What effect do her home office expenses have on her itemized deductions?

d) Assuming the original facts, what types and amounts of expenses will she carry over to next year?