Penny owns her own business and drives her car 12,000 miles a year for business and 3,000 miles a year for commuting and personal use.She wants to claim the largest tax deduction possible for business use of her car.Her total expenses related to her auto for 2013 are as follows:
$\begin{array}{lr}
\text { Gas, oil, and maintenance } &\$ 4,050 \
\text { Insurance } &720 \
\text { Interest on car loan } &500 \
\text { Depreciation } &2,960 \
\text {License } &80 \
\text {Parking fees and tolls ( 100 \% business) } &130
\end{array}$
Penny's total deduction for business use of the auto in 2013 is:

Question

Penny owns her own business and drives her car 12,000 miles a year for business and 3,000 miles a year for commuting and personal use.She wants to claim the largest tax deduction possible for business use of her car.Her total expenses related to her auto for 2013 are as follows:
$\begin{array}{lr}
\text { Gas, oil, and maintenance } &\$ 4,050 \
\text { Insurance } &720 \
\text { Interest on car loan } &500 \
\text { Depreciation } &2,960 \
\text {License  } &80 \
\text {Parking fees and tolls (  100 \% business)  } &130
\end{array}$
Penny's total deduction for business use of the auto in 2013 is:

Quizplus · Accepted Answer

The deduction is calculated by adding the business portion of the expenses and the full amount of parking fees and tolls. Business miles are 12,000 out of 15,000 total miles, so 80% of expenses are deductible. Total expenses excluding parking fees and tolls are $8,310. 80% of $8,310 is $6,648. Adding $130 for parking fees and tolls gives $6,778. However, the correct choice is $7,310, which suggests a calculation error or additional context not provided.

Penny Owns Her Own Business and Drives Her Car 12,000