Question

Tina incurred $4,000 in actual expenses to operate the vehicle she uses in her consulting business. During Tax Year 2023, Tina drove the vehicle a total of 8,000 miles, 2,000 of which were business-use. What amount of her actual expenses can she deduct as a vehicle expense on her Schedule C (1040), line 9?

Answer 1

To determine how much of Tina's actual vehicle expenses she can deduct for business use, we first need to establish the proportion of her total vehicle use that is attributed to business.

1. Total miles driven: 8,000 miles
2. Business miles driven: 2,000 miles

Now, we calculate the business use percentage:

\[ \text{Business use percentage} = \frac{\text{Business miles}}{\text{Total miles}} = \frac{2,000 \text{ miles}}{8,000 \text{ miles}} = 0.25 \text{ or } 25% \]

Next, we apply this percentage to the actual expenses incurred:

\[ \text{Deductible expenses} = \text{Total actual expenses} \times \text{Business use percentage} = 4,000 \times 0.25 = 1,000 \]

Therefore, the amount of her actual expenses that Tina can deduct as a vehicle expense on her Schedule C (1040), line 9, is $1,000.