Shelley is employed in Texas and recently attended a two-day business conference in New Jersey. Shelley spent the entire time at the conference and documented her expenditures (described below). What amount can Shelley deduct as an employee business expense? $\ \text{Airfare to New Jersey}\quad\quad\quad\quad\quad\quad\quad\$2,000$
$\ \text{Meals}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad220$
$\ \text{Lodging in New Jersey}\quad\quad\quad\quad\quad\quad\quad450$
$\ \text{Rental car}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad480$

Question

Quizplus · Accepted Answer

Shelley's airfare expense, meals, and lodging are all deductible as employee business expenses. However, the rental car expense is only partially deductible because it includes both business and personal use. According to IRS rules, Shelley can only deduct the amount that was directly related to business use (i.e. driving to and from the conference and any other business-related travel during her stay).

To determine the deductible amount for the rental car, Shelley should keep a record of the total mileage driven and the amount of that mileage that was for business purposes. For example, if Shelley drove a total of 300 miles during her trip and 100 of those miles were for business purposes, then she could deduct 1/3 of the total rental car expense ($480/3 = $160).

So, the total deductible expenses for Shelley's business trip would be:

Airfare: $2,000
Meals: $220
Lodging: $450
Rental car (business use only): $160

Total: $2,830

Therefore, the best choice is B - $2,740.

Shelley Is Employed in Texas and Recently Attended a Two-Day Airfare to New Jersey$2,000\ \text{Airfare to New Jersey}\quad\quad\quad\quad\quad\quad\quad\$2,000 Airfare to New Jersey$2,000

Shelley Is Employed in Texas and Recently Attended a Two-Day $\ \text{Airfare to New Jersey}\quad\quad\quad\quad\quad\quad\quad\$2,000$