Question

# Tax - Intermediate Vehicle Expense [2019] _ 7 Calculate actual vehicle expenses for Tom, a self-employed...

 Tax - Intermediate Vehicle Expense [2019] _ 7 Calculate actual vehicle expenses for Tom, a self-employed business owner who used his own car for company business. He drove 23,457 total miles during the year, of which 19,577 were business-use miles. Tom's car is nine years old and is fully depreciated. His other automobile expenses include \$2,400 gas, \$360 oil changes, \$1,250 repairs, \$400 insurance, and \$150 personal property tax. A.- \$3,682 B.- \$3,806 C.- \$4,410 D.- \$4,560 8 In which of the following situations is claiming the standard mileage rate on business expenses for their car MOST likely to benefit a taxpayer? A.- Low mileage with low business use. B.- Low mileage with high business use. C.- High mileage with low business use. D.- High mileage with high business use.

7 . Ans : C

Working Notes

Calculation of Actual Vehicle expenses for Tom

Gas = \$2400

Oil Changes = \$360

Repairs = \$1250

Insurance = \$400

Total Vehicle Expesnes = \$2400+\$360+\$1250+\$400

= \$4410

Note : Personal property tax is not a vehicle expense

8. Ans : D High Milege with High Business Use

When you are using Standard Mileage rate , You cannot deduct individual expenses for car. In the above High Milege with High Business Use situation is claiming the standard mileage rate on business expenses for their car MOST likely to benefit a taxpayer

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