Final answer:
When choosing between the actual expense method and the automatic mileage method for tax purposes, a taxpayer should consider factors such as option 1) The cost of insurance on the automobile 2) The distance traveled 3) The type of vehicle and 4) The availability of parking.
Step-by-step explanation:
When choosing between the actual expense method and the automatic mileage method, a taxpayer should consider several factors:
1) The cost of insurance on the automobile: Depending on the type of vehicle and the driver's history, insurance rates may vary. This can be an additional expense to consider.
2) The distance traveled: The automatic mileage method calculates expenses based on the number of miles driven, so if a taxpayer frequently travels long distances, this method may be more beneficial.
3) The type of vehicle: The actual expense method takes into account various vehicle-related costs such as fuel, maintenance, and depreciation. So, the type of vehicle and its associated expenses should be considered.
4)The availability of parking: While not directly related to the choice between the two methods, the availability of parking may affect overall expenses. For example, if parking is expensive or difficult to find, it may be beneficial to choose the automatic mileage method and minimize driving.
So, all of the above factors 1) The cost of insurance on the automobile 2) The distance traveled 3) The type of vehicle and 4) The availability of parking should be considered.