During 2018, Marsha, a self-employed CPA, drove her car 24,000 miles. The detail of the mileage is as follows:
?
$$\begin{array} { l r }
\text { Personal Use } & 3,000 \text { miles } \
\text { Transportation between home and office } & 3,000 \text { miles } \
\text { Transportation to and from clients' offices } & 18,000 \text { miles }
\end{array}$$
Marsha's 2018 records show that her car expenses totaled $14,890. The details of the expenses are as follows:
?
$$\begin{array} { l r }
\text { Gas, oil, and repairs } & 9,830 \
\text { Insurance and licensing } & 1,500 \
\text { Depreciation } & 2,960 \
\text { Interest on car loan } & 400 \
\text { Tolls and parking at clients' offices } & 200
\end{array}$$
What is the amount of her deduction for her use of the car?

Question

During 2018, Marsha, a self-employed CPA, drove her car 24,000 miles. The detail of the mileage is as follows:
?
$$\begin{array} { l r } 
\text { Personal Use } & 3,000 \text { miles } \
\text { Transportation between home and office } & 3,000 \text { miles } \
\text { Transportation to and from clients' offices } & 18,000 \text { miles }
\end{array}$$
Marsha's 2018 records show that her car expenses totaled $14,890. The details of the expenses are as follows:
?
$$\begin{array} { l r } 
\text { Gas, oil, and repairs } & 9,830 \
\text { Insurance and licensing } & 1,500 \
\text { Depreciation } & 2,960 \
\text { Interest on car loan } & 400 \
\text { Tolls and parking at clients' offices } & 200
\end{array}$$
What is the amount of her deduction for her use of the car?

Quizplus · Accepted Answer

To calculate the deduction, Marsha can choose between the standard mileage rate or the actual expenses method. 
Using the standard mileage rate of 54.5 cents per mile for 2018, Marsha's deduction would be 24,000 miles x $0.545 = $13,080.
However, using the actual expenses method, Marsha can deduct the sum of her car expenses that are attributable to her business use of the vehicle. This includes the portion of depreciation, insurance, repairs, and maintenance that are allocated to the business use of the car. 
According to the details given, Marsha's car expenses totaled $14,890, but this included $4,890 of personal expenses (parking fees and tolls). Therefore, her actual expenses that are attributable to the business use of the car are $14,890 - $4,890 = $10,000. 
Thus, her deduction for use of the car using the actual expenses method would be $10,000. 
Therefore, the best choice is D.

During 2018, Marsha, a Self-Employed CPA, Drove Her Car 24,000