Question

Gemma incurred $4,000 in actual expenses to operate the vehicle she owns and uses in her consulting business. During Tax Year 2024, Gemma drove the vehicle a total of 10,000 miles, 2,500 of which were business-use. Excluding depreciation, what amount of the actual expenses listed above can she deduct as a vehicle expense on her Schedule C (1040), line 9?
$1,000
$2,000
$3,000
$4,000

Answer 1

$1,000

Business-use percentage = 2,500 / 10,000 = 25%.
Deductible operating expenses = $4,000 × 25% = $1,000.