Question

What are the two methods of computing automobile expenses of​ self-employed taxpayers?

A.​Self-employed individuals can deduct business automobile expenses under either of two​ methods: the actual expense method or the mileage method. The actual expense method includes​ gasoline, oil,​ repairs, and depreciation for the​ business-use portion of the automobile. The mileage method allows taxpayers to deduct 58 cents per business mile. Parking and tolls are not deductible under either method. Taxpayers do not have to be consistent from year to year.

B.​Self-employed individuals can deduct business automobile expenses under either of two​ methods: the actual expense method or the mileage method. The actual expense method includes​ gasoline, oil,​ repairs, and depreciation for the​ business-use portion of the automobile. The mileage method allows taxpayers to deduct 58 cents per business mile. Parking and tolls can be deducted in addition to the amounts computed under both methods. Taxpayers generally must be consistent over the years.

C.​Self-employed individuals can deduct business automobile expenses under either of two​ methods: the actual expense method or the mileage method. The actual expense method includes​ gasoline, oil,​ repairs, and depreciation for the​ business-use portion of the automobile. The mileage method allows taxpayers to deduct 56 cents per business mile. Parking and tolls are not deductible under either method. Taxpayers do not have to be consistent from year to year.

D.​Self-employed individuals can deduct business automobile expenses under either of two​ methods: the actual expense method or the mileage method. The actual expense method includes​ gasoline, oil,​ repairs, and depreciation for the​ business-use portion of the automobile. The mileage method allows taxpayers to deduct 56 cents per business mile. Parking and tolls can be deducted in addition to the amounts computed under both methods. Taxpayers generally must be consistent over the years.

Answer 1

option B

Two methods of computing automobile expenses of​ self-employed taxpayers:

1. Actual expense method or,

2. mileage method.

In actual expense method: if vehicles used simultaneously for your business activities. examples of annual expenses you can deduct are

1. parking fees and tolls,

2. gasoline,

3. oil,

4. maintainance,

5. repairs etc...

In Mileage rate method : taxpayers are allowed to deduct 58% per busineess mile ( for the year 2019). further business portion of parking and tolls expenses are also allowed to deduct