Question

Mario owns his own business and drives his car 15,000 miles a year for business and 7,500 miles a year for communiting and personal use. He wants to claim the largest tax deduction possible for business use of his car. His total auto expense for 2017 are as follows:
?Gas oil, and maintenance...$8,900
Insurace.................................800
Interest on car loan...............480
?Depreciation.........................3,160
License.................................180
Parking fee...........................290

?What is Mario's 2017 deduction using the standard mileage rate method?

?Please help me. Thank you!

Answer 1

Note :

• For 2017 the standard milage rate is 53.50 cents per mile for business
• Parking fee expenese can futher be deducted if incured for bussiness trip . Since nothing is metioned in the question , it is assumed that parking fee in the question is for business trips only.
•   Interest on car loan is deductible for the percentage of use of car in business . ie 66. 67 % [15,000 miles / 22,500 miles].
• No other expenses are deductible

Answer

Mario's 2017 deduction using the standard mileage rate method

Standard rate deduction (15,000 miles * 53.50 cents)	$8,025
Interest on Car loan ($480 * 66.67 %)	$320
Parking fee	$290
Mario's 2017 deduction for business use of car	$8,635