Question
Jackson, a self-employed taxpayer, uses his automobile 92% for business and during 2021 drove a total of 23,400 business miles. Information regarding his car expenses
Jackson, a self-employed taxpayer, uses his automobile 92% for business and during 2021 drove a total of 23,400 business miles. Information regarding his car expenses is listed below. Business parking $ 150
Auto insurance 1,500
Auto club dues (includes towing service) 180
Toll road charges (business-related) 225
Oil changes and engine tune-ups 240
Repairs 165
Depreciation allowable 3,000
Fines for traffic violations (incurred during business use) 300
Gasoline purchases 3,300
What is Jackson's deduction in 2021 for the use of his car if he uses:
If required, round your answers to nearest dollar.
a. The actual cost method?
b. The automatic mileage method?
c. What records must Jackson maintain? Keeping a written or electronic log of miles driven, the dates the automobile was used, the location of travel, and the business purpose is enough evidence for the __________. If the _____________ is used, keeping copies of receipts, canceled checks, and bills in addition to a mileage log is sufficient. Records and logs should be kept contemporaneously (e.g., updated weekly or daily).
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