William is employed by an accounting firm and uses his automobile in connection

Question

William is employed by an accounting firm and uses his automobile in connection with his work. During the month of October 2015, he works at the office for 3 days and participates in the audit of a key client for 19 days. In the audit situation, William goes directly from his home to the client?s office. On all other days, he drives to his employer?s office. On four Saturdays in October, he drives from his home to a local university where he attends classes in a pan-time MB program. Relevant mileage is as follows: Home to office 12 Office to audit client 13 Home to audit client 14 Home to university Using the automatic mileage method, what is William?s deduction for the month?

Explanation / Answer

Home to office is not considered a transportation expense. And in the question it nowhere says that he drives from the office to audit the client. You are left with "home to audit client" and "home to university".

Home to audit client to home is 28 miles (14+14) and Home to university to home is 20 miles (10+10).
Take the 28 miles times the 19 days you drove them for a total of 532 miles and take the 20 miles times the 4 days you drove those miles for a total of 80 miles, then add the two together for the total miles driven in October which would be 612 miles.

(14+14)=28*19=532
(10+10)=20*4=80

532+80=612

After that, you are given (via online or textbook) that for the year 2013 the deduction is based on 56.5 CENTS per mile for business miles. (Yes, the travel for education counts as business since he is furthering his education.) So take the 612 miles times 56.5 cents per mile to get 34578 cents per mile. Lastly, you must convert the cents into dollars so divide by 100 to get approximately $346. (100 pennies in one dollar)

612*56.5=34578/100=345.78 or 346 (rounded to the nearest dollar).

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