Question - Sarah purchased a new car at the beginning of the year. She makes an adequate accounting to her employer and receives a $2,400 (12,000 miles * 20 cents per mile) reimbursement in 2013 for employment-related business miles. She incurs the following expense related to both business and personal use:
Gas and Oil - $6,000
Repairs and maintenance - $2,500
Depreciation - $3,000
Insurance - $1,800
Total - $13,300
She also spent $200 on parking and tolls that were related to business. During the year she drove a total of 20,000 miles.
a) Calculate Sarah's deductible transportation expense, using the actual expense method.
b) Calculate Sarah's deductible transportation expense, using the standard mileage method.