Question

Gabby operates a pizza delivery service. This year she paid delivery personnel $18,000 in salary. She carefully documented the business use of the auto (11,700 miles this year) and her $7,350 of vehicle expenses (for gas, oil, repairs, and auto lease payments). What amount of these expenses may Gabby deduct as business expenses?

Answer 1

$25,350

Step-by-step explanation:

Since, Gabby paid a salary of $18,000 and $7,350 for transportation.

Business expenses = salary + transportation

= $(18000+7350)

Business expenses = $25,350

P.S: For transportation, Gabby can deduct $6,727.5 (57.5¢ a mile in 2020 × 11,700) or she can choose to deduct actual costs of $7,350.