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This post calculates business auto expenses for Teresa.

Teresa is a civil engineer who uses her automobile for business evenly throughout the year. Teresa drove her automobile a total of $22,650 miles evenly during 2011, of which 95% was business mileage. The actual cost of gasoline, oil, depreciation, repairs and insurance for the year was $8,300.

1. How much is Teresa's transporting deduction based on the standard mileage?
2. How much is Teresa's transporting deduction based on the actual cost method?
3. Which method should Teresa use to calculate transportation deduction and why?

Solution Preview

The business mileage rate is 51 cents for 2011.

She drove 22,650 miles and 95% was business use.

22650 / 95%= 21517.5 = 21518 rounded.

21,518 x 0.51 = $10,974.18

The actual cost method would allow her to deduct the ...

Solution Summary

The solution calculates and shows all steps to determine the transporting deduction based on standard mileage, based on the actual cost method, and also shows which method Theresa should use to calculate transportation deduction.

$2.19