Question

Rodrigo works as a self-employed salesperson. His job requires that he spend most of his time outside the office calling on customers. In addition, to supplement his income, he works 1 night a week and on weekends as a waiter at an exclusive seafood restaurant in the city. During the year, he keeps the following record of his travel: Miles Home to office 850 Office to home 425 Office to restaurant 300 Restaurant to home 1,200 Home to restaurant 725 Office to customers' office 7,100 Customers' office to restaurant 400 Total miles 11,000 If he uses the standard mileage rate, what amount can she deduct as a business automobile expense?

Answer 1

Rodrigo can deduct a total of 7,500 business miles driven at the standard IRS mileage rate, not including commuting from home to office and vice versa. If the standard mileage rate is $0.56 per mile, Rodrigo could deduct $4,200 as a business automobile expense.

Step-by-step explanation:

To determine the amount Rodrigo can deduct as a business automobile expense using the standard mileage rate, only the miles driven for business purposes can be considered. Commuting from home to office and back is generally not deductible. The miles that Rodrigo can deduct would be the miles from the office to customers' offices, which are 7,100 miles, and customers' office to the restaurant, which are 400 miles, totaling 7,500 business miles. Assuming the IRS standard mileage rate for the tax year in question is 56 cents per mile (as an example, this rate changes annually), Rodrigo would calculate his deductible expense as follows:

Business miles (7,500) x Standard mileage rate (e.g., $0.56) = Deductible expense

Thus, Rodrigo would be able to deduct $4,200 as a business automobile expense (7,500 miles x $0.56/mile).