Question

" Ryan estimates that he drove approximately 1,300 miles on business trips, but he can only provide written documentation of the business purpose for trips totaling 820 miles. What business expense amount can Ryan deduct (if any) for these trips?

Answer 1

Ryan used his personal vehicle and commercial expenses. He will be able to use this information if he can prove the commercial use he made during the trip. This verification must be done through records, in this case, he can claim the cost of all the trips he made, including the cost of depreciation of the own car used by him. In other words, Ryan may apply for compensation, which will be related to the depreciation of the car and travel expenses. The total deduction for this indemnity is calculated as follows:

[(820 / 12,000) x $ 3000] + (820/1300) x $ 1,500] = $ 205 + $ 946 = $ 1,151.

However, Ryan will also be able to claim compensation at the standard mileage rate. In that case, he will only need to prove the 820 miles run by him. Since the base on the standard mile rate is 57.5 cents per mile, Ryan will be able to deduct deduct $ 443.