Jackson, a self-employed taxpayer, uses his automobile 92% for business and during 2021 drove a total of 20,600 business miles. Information regarding his car expenses is listed below.
Business parking $ 290
Auto insurance 2,900
Auto club dues (includes towing service) 348
Toll road charges (business-related) 435
Oil changes and engine tune-ups 464
Repairs 319
Depreciation allowable 5,800
Fines for traffic violations (incurred during business use) 580
Gasoline purchases 6,380
What is Jackson's deduction in 2021 for the use of his car if he uses:
If required, round your answers to nearest dollar.
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a. The actual cost method?
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A taxpayer has two choices in determining automobile expenses: the automatic mileage method and the actual cost method.
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b. The automatic mileage method?
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