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Buying a car under my business
Posted on 11/8/12 at 4:46 pm
Posted on 11/8/12 at 4:46 pm
So I have a "business" - no legal filings, but I do have a business bank account, card, and checks with my business name on it. It's for no other purpose than to keep track of my business expenses more easily.
I'm about to buy my wife a new car - Will I have any problems buying it under the business? Just pay it out of that account for documentation?
I'm about to buy my wife a new car - Will I have any problems buying it under the business? Just pay it out of that account for documentation?
4
Posted on 11/8/12 at 4:51 pm to NaturalBeam
how did you get a business bank account without filing with the SOS.
Posted on 11/8/12 at 4:56 pm to bryso
Just opened one with Chase entitled "NaturalBeam, Attorney at Law". Showed a business card, and boom.
Also saved me $5 on my Sam's membership
Also saved me $5 on my Sam's membership
Posted on 11/8/12 at 5:03 pm to NaturalBeam
how are u paid? independent contractor? i assume u get a 1099 at the end of the year?
Posted on 11/8/12 at 5:08 pm to bryso
Yes and yes
Posted on 11/8/12 at 5:13 pm to NaturalBeam
man this is going to be a tough one to swing
would likely set off a flag... if i were u i would incorporate as an S corp and then make ur wife an employee...
its one thing to write off your miles or maintenance whichever u pick. but its a totally different thing to write off a whole car that is driven by someone other than u.
would likely set off a flag... if i were u i would incorporate as an S corp and then make ur wife an employee...
its one thing to write off your miles or maintenance whichever u pick. but its a totally different thing to write off a whole car that is driven by someone other than u.
Posted on 11/8/12 at 5:20 pm to bryso
Ha that's what I was afraid of. Just didn't know the likelihood of getting flagged for something like that. Thanks.
Posted on 11/8/12 at 5:23 pm to NaturalBeam
i'm not a CPA...so i could be 100% wrong... but i am 1099 as well... dont have a separate bank account..i just use mint to track my expenses and then take the itemized deductions where turbotax tells me.... i dont remember running across a "s/o automobile deduction"
Posted on 11/9/12 at 1:50 am to NaturalBeam
Beyond the ethical thing (apparently not a problem), people with businesses buy shite for their family all the time. She just needs to be on the payroll & you need to be ready to shows its business use.
Posted on 11/9/12 at 8:42 am to Tigah in the ATL
quote:
ethical thing (
i mean if its allowed by the IRS i dont really see where ethics comes into play.
Posted on 11/9/12 at 8:47 am to bryso
quote:
i mean if its allowed by the IRS i dont really see where ethics comes into play
If being the operative word. He wants to buy a car for his wifes personal use under a business that doesn't really operate as a business. It just catches expenses.
No, nothing shady at all here.
Posted on 11/9/12 at 8:59 am to bryso
quote:It is not allowed. A taxpayer is entitled to deduct expenses for the business use of an automobile. The OP stated that the business use would be zero since the car is for his wife to use.
i mean if its allowed by the IRS i dont really see where ethics comes into play.
Posted on 11/9/12 at 10:09 am to Poodlebrain
What if you have an LLC and own a building that you rent out, what can you write off? Should I start a new thread for this?
Posted on 11/9/12 at 10:17 am to Sal Minio
Regardless of the business that an automobile is being used for, 100% is never really a good idea to write-off. Hard to argue any car is used 100% for business unless you have another car available for personal use.
Whether it's a rental property or any other self-employed activity, mileage or actual expenses can be taken, whichever is greater. The mileage rate is $.55 as of now. It moves with gas prices and inflation (it's only been going up). Actual expenses should apply a business use percentage to expenses. So if you pay $1,000 a year for auto insurance and use the car 80% for business use, your auto insurance write-off is $800.
That is the right way to do it rather than just paying all expenses out of the business. You can make adjustments at year end so all of it isn't expensed as another alternative.
Whether it's a rental property or any other self-employed activity, mileage or actual expenses can be taken, whichever is greater. The mileage rate is $.55 as of now. It moves with gas prices and inflation (it's only been going up). Actual expenses should apply a business use percentage to expenses. So if you pay $1,000 a year for auto insurance and use the car 80% for business use, your auto insurance write-off is $800.
That is the right way to do it rather than just paying all expenses out of the business. You can make adjustments at year end so all of it isn't expensed as another alternative.
Posted on 11/9/12 at 10:28 am to Sal Minio
quote:
What if you have an LLC and own a building that you rent out, what can you write off? Should I start a new thread for this?
writing off the car purchase is going to be tough... but mileage after that shouldn't be an issue.
Posted on 11/9/12 at 10:30 am to VABuckeye
quote:
a business that doesn't really operate as a business.
when you're an indy contractor the govt lets you do things a little differently than the standard person....
Posted on 11/9/12 at 10:37 am to NaturalBeam
quote:
NaturalBeam
so when your wife is in an accident, just be prepared to have your company brought into the lawsuit.
Posted on 11/9/12 at 10:40 am to Chad504boy
quote:
company
is used loosely here....
basically he has a separate checking account to make it easier to track how many paperclips he buys....
Posted on 11/9/12 at 10:41 am to bryso
quote:
is used loosely here....
basically he has a separate checking account to make it easier to track how many paperclips he buys....
soo......... that extra account in a fake business name would be in jeopardy.
Posted on 11/9/12 at 11:28 am to Chad504boy
quote:
so when your wife is in an accident, just be prepared to have your company brought into the lawsuit.
This.
Are you buying it outright, or with a car loan? If doing a car loan, bank will probably want some collateral securing that loan.
My opinion: You need to legally setup your "business" first. Do an LLP or something to protect yourself for when your wife wrecks your car; which will happen inevitably.
This post was edited on 11/9/12 at 11:30 am
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