Jackson, a self-employed taxpayer, uses his automobile 72% for business and during 2023 drove a total of 17,800 business miles. Information regarding his car expenses is listed below. Business parking Auto insurance Auto club dues (includes towing service) Toll road charges (business-related) Oil changes and engine tune-ups Repairs Depreciation allowable Fines for traffic violations (incurred during business use) Gasoline purchases $220 2,200 264 330 352 242 4,400 440 4,840 What is Jackson's deduction in 2023 for the use of his car if he uses: If required, round your answers to nearest dollar. a. The actual cost method? 9,251 X Feedback Check My Work A taxpayer has two choices in determining automobile expenses: the automatic mileage method and the actual cost method. b. The automatic mileage method? 11,659 X Feedback ▼ Check My Work Incorrect 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 standard rate method ✔. If the actual expense method X 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).
Jackson, a self-employed taxpayer, uses his automobile 72% for business and during 2023 drove a total of 17,800 business miles. Information regarding his car expenses is listed below. Business parking Auto insurance Auto club dues (includes towing service) Toll road charges (business-related) Oil changes and engine tune-ups Repairs Depreciation allowable Fines for traffic violations (incurred during business use) Gasoline purchases $220 2,200 264 330 352 242 4,400 440 4,840 What is Jackson's deduction in 2023 for the use of his car if he uses: If required, round your answers to nearest dollar. a. The actual cost method? 9,251 X Feedback Check My Work A taxpayer has two choices in determining automobile expenses: the automatic mileage method and the actual cost method. b. The automatic mileage method? 11,659 X Feedback ▼ Check My Work Incorrect 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 standard rate method ✔. If the actual expense method X 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).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 9-21 (Algorithmic) (LO. 2)
Jackson, a self-employed taxpayer, uses his automobile 72% for business and during 2023 drove a total of 17,800 business miles.
Information regarding his car expenses is listed below.
Business parking
Auto insurance
Auto club dues (includes towing service)
Toll road charges (business-related)
Oil changes and engine tune-ups
$220
2,200
264
330
352
242
Depreciation allowable
4,400
Fines for traffic violations (incurred during business use)
440
Gasoline purchases
4,840
Repairs
What is Jackson's deduction in 2023 for the use of his car if he uses:
If required, round your answers to nearest dollar.
a. The actual cost method?
9,251 X
Feedback
Check My Work
A taxpayer has two choices in determining automobile expenses: the automatic mileage method and the actual cost method.
b. The automatic mileage method?
11,659 X
Feedback
Check My Work
Incorrect
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 standard rate method ✔. If the actual expense method X 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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