Chelsea, who is self-employed, drove her automobile a total of 20,000 business miles in 2016. This represents about 75% of the auto's use. She has receipts as follows: $$\begin{array} { | l | r | }
\hline \text { Parking (business only) } & \$ 500 \
\hline \text { Tolls (business only) } & 200 \
\hline \text { Repairs } & \$ 1,000 \
\hline
\end{array}$$ Chelsea has an AGI for the year of $50,000. Chelsea uses the standard mileage rate method. After application of any relevant floors or other limitations, she can deduct
A) $11,500.
B) $12,200.
C) $10,800.
D) $11,325.

Question

Chelsea, who is self-employed, drove her automobile a total of 20,000 business miles in 2016. This represents about 75% of the auto's use. She has receipts as follows: $$\begin{array} { | l | r | } 
\hline \text { Parking (business only) } & \$ 500 \
\hline \text { Tolls (business only) } & 200 \
\hline \text { Repairs } & \$ 1,000 \
\hline
\end{array}$$ Chelsea has an AGI for the year of $50,000. Chelsea uses the standard mileage rate method. After application of any relevant floors or other limitations, she can deduct
A) $11,500.
B) $12,200.
C) $10,800.
D) $11,325.

Quizplus · Accepted Answer

Chelsea can deduct the standard mileage rate for 20,000 business miles driven. In 2016, the standard mileage rate was $0.54 per mile. Therefore, 20,000 miles x $0.54 = $10,800. Additionally, she can deduct the full amount of parking and tolls, which are $500 and $200, respectively. So, $10,800 + $500 + $200 = $11,500.

Chelsea, Who Is Self-Employed, Drove Her Automobile a Total of 20,000