2023 Advanced Exam - Advanced Scenario 8: Julia Oakley - Question 4 of 7. Interview Notes • Julia is a data entry clerk, age 26, and single. • Julia has investment income and a consolidated broker’s statement. • Julia is self-employed delivering groceries for Quick Market on the weekends. She received a Form 1099-NEC and a Form 1099-K. She received additional cash payments of $535. • Julia uses the cash method of accounting. She uses business code 492000. • Julia provided a statement from the grocery delivery service indicating the fees paid for the year. These fees are considered ordinary and necessary for the grocery delivery business: o $150 for insulated box rental o $50 for vehicle safety inspection (required by Quick Market) o $600 for Quick Market fees • Julia also kept receipts for the following out-of-pocket expenses: o $80 for business parking o $300 for speeding ticket o $160 for Julia's lunches • Julia’s record keeping application shows she has driven a total of 2,500 miles during and between deliveries. She also drove 1,500 miles between her home and the first and last delivery of each day. o She placed her only vehicle, an SUV, in service on 3/15/2020. The total mileage on her SUV for tax year 2023 was 12,000 miles. Of that, 8,000 miles were personal miles. Julia will take the standard business mileage rate. • Julia is paying off her student loan from 2017, when she completed her undergraduate degree. • Julia is working towards her Master of Education degree to start a new career as an Associate Professor. She took a few college courses this year at an accredited college. • Julia took an early distribution of $3,000 from her IRA in April. She used $2,400 of the IRA distribution to pay her educational expenses. • If Julia has a refund, she would like it deposited into her checking account. 26. The total standard mileage deduction for Julia's business on Schedule C is $983. a. True b. False

b. False To calculate the total standard mileage deduction for Julia's business on Schedule C, we need to consider only the miles that were driven for business purposes. According to the information provided, Julia drove a total of 2,500 miles during and between deliveries. The additional 1,500 miles driven between her home and the first and last delivery of each day are generally considered commuting miles and are not deductible. For the tax year 2023, the IRS standard mileage rate for business use of a vehicle is 65.5 cents per mile (this rate can change annually, so it's important to use the correct rate for the tax year in question). Therefore, the calculation for Julia's deductible business mileage would be: 2,500 business miles x $0.655 per mile = $1,637.50 Since the calculated amount ($1,637.50) is different from the $983 stated in the question, the statement is false. Julia's total standard mileage deduction for her business on Schedule C should be $1,637.50, assuming the standard mileage rate for 2023 is 65.5 cents per mile.

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