**Please Help** Ryan is self-employed. This year Ryan used his personal auto for

Question

**Please Help**
Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $1,850 for gasoline on these trips. His depreciation on the car if he was using it fully for business purposes would be $3,000. During the year, he drove his car a total of 18,600 miles (a combination of business and personal travel).

B. Ryan estimates that he drove approximately 2,220 miles on business trips, but he can only provide written documentation of the business purpose for trips totaling 1,400 miles. What business expense amount can Ryan deduct (if any) for these trips?

Explanation / Answer

Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $1,850 for gasoline on these trips. His depreciation on the car if he was using it fully for business purposes would be $3,000. During the year, he drove his car a total of 18,600 miles (a combination of business and personal travel). A. Ryan can provide written documentation of the business purpose for trips totaling 4,650 miles. What business expense amount can Ryan deduct (if any) for these trips? Ryan can claim the direct cost of these trips, including gas ($1,850) and depreciation on the auto. However, the deduction for auto use is limited to direct costs (such as gas and oil) and the pro-rata portion of indirect costs (such as depreciation). The pro rata portion would be calculated as the business percentage of total mileage ($3,000 x [4,650 /18,600]) or $750. Hence, Ryan could deduct= $2,600

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