Vehicle Expenses
Response to the following problem:
Ginger uses her personal car for work as an employee. In 2014, Ginger drove 2,235 work-related miles and 15,544 total miles. Ginger's expenses for the car are as follows.
Depreciation $4,800
Gas 2,224
Insurance 790
License tags 60
Repairs and maintenance 210
$8,084
An accelerated depreciation method was used to compute the $4,800 depreciation expense. Last year was the first year Ginger used her car for business. Last year she used the standard mileage deduction. Her employer reimburses her $.40 a mile under an accountable reimbursement plan for each documented business mile.
a. Discuss the alternatives Ginger has for computing her car expense deduction. What amount should Ginger deduct for car expenses for 2014?
b. Discuss where Ginger reports the reimbursement and car expense deduction on her tax return.