Question

A self-employed taxpayer buys a new business automobile during the year. What method is permitted in computing car and truck expenses on Schedule C?
a. The actual cost method
b. The standard mileage rate method
c. Either the actual cost or the standard mileage rate method
d. The actual mileage method
e. None of the above

Answer 1

Answer:

The correct answer is letter "B": The standard mileage rate method.

Explanation:

Vehicle expense deductions are offered on Schedule C for self-employed taxpayers. If the vehicle expenses are itemized and are not part of a regular loan, part of the lease payment can be considered as a business expense. This is provided thanks to the standard mileage rate deduction. Parking and tolls can also be subject to deduction.