In 2013,Eileen,a self-employed nurse,drives her car 20,000 miles,of which 12,000 miles pertain to business.Expenses concerning the car include the following:
$$\begin{array} { l r }
\text { Gas and oil } & \$ 5,720 \
\text { Auto license tag } & 90 \
\text { Insurance } & 900 \
\text { Repairs } & 700 \
\text { Tires } & 400 \
\text { Parking during business use } & 300 \
\text { Tolls during business use } & 150 \
\text { Depreciation } & 2,960
\end{array}$$
Assuming Eileen purchases the car in 2013 and she wants to use the most advantageous method to determine her 2013 deduction for automobile expense,what amount can Eileen deduct as auto expenses?

Question

In 2013,Eileen,a self-employed nurse,drives her car 20,000 miles,of which 12,000 miles pertain to business.Expenses concerning the car include the following:
$$\begin{array} { l r } 
\text { Gas and oil } & \$ 5,720 \
\text { Auto license tag } & 90 \
\text { Insurance } & 900 \
\text { Repairs } & 700 \
\text { Tires } & 400 \
\text { Parking during business use } & 300 \
\text { Tolls during business use } & 150 \
\text { Depreciation } & 2,960
\end{array}$$
Assuming Eileen purchases the car in 2013 and she wants to use the most advantageous method to determine her 2013 deduction for automobile expense,what amount can Eileen deduct as auto expenses?

Quizplus · Accepted Answer

Eileen can use the standard mileage rate method, which is often more advantageous. In 2013, the standard mileage rate was $0.565 per mile. For 12,000 business miles, the deduction is 12,000 x $0.565 = $6,780. Adding parking and tolls ($300 + $150), the total deduction is $7,230.

In 2013,Eileen,a Self-Employed Nurse,drives Her Car 20,000 Miles,of Which 12,000