Question

Jackson, who is self-employed, uses his automobile 92% for business and during 2018 drove a total of 23,400 business miles. Information regarding his car expenses is listed below.

Business parking	$ 210
Auto insurance	2,100
Auto club dues (includes towing service)	252
Toll road charges (business-related)	315
Oil changes and engine tune-ups	336
Repairs	231
Depreciation allowable	4,200
Fines for traffic violations (incurred during business use)	420
Gasoline purchases	4,620

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

If required, round your answers to nearest dollar.

a. The actual cost method?
$

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b. The automatic mileage method?
$

Answer 1

a. The actual cost method

b. the automatic mileage method

As per the IRS website, standard mileage rate for 2018 is 54.5 cents, hence,

Deduction allowed = (Bussiness miles * 54.5 cents) + business parking + toll charges

=23400*54.5 + 210 + 315

=13,278