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Small Business vehicle Sec 179
Posted on 7/10/14 at 7:33 pm
Posted on 7/10/14 at 7:33 pm
Recently started a small company and looking for opportunities to decrease tax burden. Wanted to discuss acquiring a vehicle for small business use. I'm wondering how leasing vs buying a car for a company work. Financing vs paying upfront. How to avoid being flagged by the IRS. How to allocate business money to the vehicle.
Right now it seems to me that since the expiration of the large tax breaks at the first of the year, if you want a more affordable car over 6000lbs purchase. If you want a luxury car lease.
Business generates 7000-9000 dollars a month. Currently over head is 900-1200 a month. This is separate from a salaried employee position.
Sec 179 purchase calc
I do plan on meeting with my CPA but was trying to get educated on the subject.
Right now it seems to me that since the expiration of the large tax breaks at the first of the year, if you want a more affordable car over 6000lbs purchase. If you want a luxury car lease.
Business generates 7000-9000 dollars a month. Currently over head is 900-1200 a month. This is separate from a salaried employee position.
Sec 179 purchase calc
I do plan on meeting with my CPA but was trying to get educated on the subject.
5
Posted on 7/10/14 at 9:11 pm to Binx
Well you aren't going to be flagged by the irs for taking a sec 179 deduction. It is crazy how much they have reduced this deduction this year, with that being said I guess if you foresee making other sec 179 purchases in the near future you should pay in full and write it all off. But if this is your only foreseeable sec 179 purchase and you see your income level rising you could lease and use the deduction over time.
*I am winging this.
*I am winging this.
Posted on 7/11/14 at 7:09 am to Binx
Doesnt this not apply to luxury vehicles anymore because of people taking advantage of it?
Posted on 7/11/14 at 7:34 am to Binx
The expenses of owning and operating a vehicle are tax deductible only to the extent the vehicle is used for business purposes. Commuting to and from your salaried employee position does not count as business use. Discuss with your CPA how to calculate and record your business use and the consequences of business use falling below 50%.
Posted on 7/13/14 at 10:14 am to Binx
1. In my experience, the simplest way to get a "deduction" is to keep a mileage log. You get a certain amount per mile (55 or 60 cents I think), but it is only for the mileage associated with the "business".
2. If you lease or purchase a vehicle and you want to take all expenses as deduction/depreciation, then you have to use that vehicle exclusively for business and nothing else.
Bottom line, #1 is a lot easier and less audit risk.
2. If you lease or purchase a vehicle and you want to take all expenses as deduction/depreciation, then you have to use that vehicle exclusively for business and nothing else.
Bottom line, #1 is a lot easier and less audit risk.
Posted on 7/13/14 at 11:44 am to makersmark1
It is not that big of a deal. All that 179 does is essentially create an interest free loan of taxes due. Holding all things equal you will pay fewer taxes in year 1 taking 179 but more in the years following.
I would not pay more for a lease to get the interest free loan of my taxes.
Whichever is less costly from a cost of ownership point of view would be my decision maker.
I would not pay more for a lease to get the interest free loan of my taxes.
Whichever is less costly from a cost of ownership point of view would be my decision maker.
This post was edited on 7/14/14 at 7:56 pm
Posted on 7/13/14 at 10:07 pm to I B Freeman
Just make sure it gets passed and signed into law first. We are holding off purchasing equipment until the deal is finalized.
Posted on 8/5/14 at 2:03 pm to Da Hammer
quote:
We are holding off purchasing equipment until the deal is finalized.
And it's August already.
Posted on 8/5/14 at 3:18 pm to VetteGuy
Posted on 12/4/14 at 7:56 am to Binx
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