Question

Jackson, who is self-employed, uses his automobile 76% for business and during 2018 drove a total...

Jackson, who is self-employed, uses his automobile 76% for business and during 2018 drove a total of 15,000 business miles. Information regarding his car expenses is listed below.

Business parking $ 280
Auto insurance 2,800
Auto club dues (includes towing service) 336
Toll road charges (business-related) 420
Oil changes and engine tune-ups 448
Repairs 308
Depreciation allowable 5,600
Fines for traffic violations (incurred during business use) 560
Gasoline purchases 6,160

What is Jackson's deduction in 2018 for the use of his car if he uses:

a. The actual cost method?
b. The automatic mileage method?

**SHOW WORK AND EXPLAIN**

Homework Answers

Answer #1

solution :

A.

Real cost Method

Derivation = 140 + 200 + (1300 + 180 + 210 + 160 + 2850 + 2800)*90% = 140 + 200 + 6750 = $7090

Business Parking and Toll street charges have been acquired full for business.

Fines are not permitted as conclusion.

B.

Programmed Mileage Method

Conclusion = 14000*0.545 = $7630

Standard Mileage Rate = 54.5 pennies per mile.

He can deduct $540 more by utilizing the Sutomatic Mileage technique than by utilizing the Actual Expenses strategy

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