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    Tax deductions: auto expenses

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    23. Fran, who is self-employed, drove her automobile a total of 40,000 business miles in 2006. She also has receipts for business-related use as follows:

    Parking - $500
    Fuel - 900
    Tolls - 200

    Fran has an AGI for the year of $50,000. If Fran uses the standard mileage rate method, she can deduct

    a. $17,800
    b. $18,300
    c. $18,500
    d. $19,400

    24. JoAnn meets with several customers each day in the course of her job and in each case travels to the customer's place of business. JoAnn has kept detailed records of her expenses which show the following:

    Automobile expenses - $2,500
    Tolls and parking - $500
    Meals (JoAnn eats alone) - $1,000
    Commute to employer's job location - $800

    JoAnn is not reimbured by her employer for any expenses. JoAnn's AGI for the year is $30,000 and she has no other miscellaneous itemized deductions. JoAnn may deduct transportation expenses of

    a. $2,400
    b. $2,500
    c. $2,900
    d. $3,700

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    Solution Preview

    23. Fran can use the 2006 mileage rate of $.445/mile plus the actual costs of parking and tolls, provided those last two items relate directly to ...

    Solution Summary

    The two tax problems about auto expenses and employee business expenses are answered including an explanation for the response.