A taxpayer may use either the actual cost method or the standard mileage rate for deducting auto expenses.

Question

Quizplus · Accepted Answer

This statement is true. A taxpayer has the option to use either the actual cost method or the standard mileage rate for deducting auto expenses on their tax return. The actual cost method involves keeping track of all expenses related to the vehicle, including gas, maintenance, repairs, and depreciation, while the standard mileage rate is a set rate per mile driven that takes into account all these expenses. The taxpayer must choose which method to use based on which one will result in a greater deduction.

A Taxpayer May Use Either the Actual Cost Method or the Standard