Problem 9-27 (Algorithmic) (LO. 2)

Jackson, a self-employed taxpayer, uses his automobile 74% for business and during 2021 drove a total of 23,400 business miles. Information regarding his car expenses is listed below.

Business parking	$ 200
Auto insurance	2,000
Auto club dues (includes towing service)	240
Toll road charges (business-related)	300
Oil changes and engine tune-ups	320
Repairs	220
Depreciation allowable	4,000
Fines for traffic violations (incurred during business use)	400
Gasoline purchases	4,400

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 (actual expense method / standard rate method). If the (actual expense method / standard rate method) 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).