Question

Which of the following is an acceptable method for calculating a deduction for auto expenses for business purposes?

1) Actual expenses method
2) Standard mileage rate method
3) Both A and B
4) None of the above

Answer 1

Both the Actual expenses method and the Standard mileage rate method are acceptable for calculating a deduction for auto expenses for business purposes.

Step-by-step explanation:

For calculating a deduction for auto expenses for business purposes, the acceptable methods include:

1. Actual expenses method: This involves keeping track of all costs associated with the use of the vehicle for business purposes, such as gas, maintenance, insurance, and depreciation.
2. Standard mileage rate method: The IRS provides a standard mileage rate that taxpayers can multiply by the number of business miles driven for a deduction. This simplifies the process by not requiring detailed records of actual expenses.

Both methods are indeed acceptable for calculating business auto expense deductions. The best method to choose depends on the circumstances and which yields the higher deduction.