Question

ro-r- wy, vupuuruny: 8-31 Car Expense Computation. E is a sales representative for T Corporation, who treats him as an independent contractor. This year he incurred the following expenses for transportation during the year: Gas and oil ...... Repairs Insurance. ........ Interest on car loan .... Depreciation License ................................ $1,200 200 700 400 .... 2,000 100 In addition, he spent $70 on parking while calling on customers. E drove the car 20,000 miles during the year, 18,000 for business. a. Compute E's deduction, assuming the standard mileage rate is elected. b. Compute E's deduction, assuming he claims actual expenses.

Answer 1

Given in question:-

Total Car Expenses 4670$

Total Miles 20000Mile

For Business travel 18000mile

A) gas & oil 1200$

standard use for business 1080$ (4670/20000*18000)

E's Deduction (1200$ -1080$)=120$

B) Std milage rate 4670$/20000 mile =0.2335$/mile

Business Exp. (0.2335$/mile/18000mile)=4203$

E's Deduction (4670$-4203$)=467$