I just got done watching a program on Discovery Times Channel. The program gave the insight on the new Nissan Titan, Ford F150, and Hummer H2 and 1. At the end of the show, the people that were in the Milwaukee, WI. Hummer Stealership said that one reason they could afford this H2 was because they could deduct 3/4's of the purchase price off their upcoming taxes. The elgibilty was because they are a business owner and purchased a "Heavy Weight" truck. I have never heard of this. Anyone else? I still will never buy one!.
Its true. If I remember the tax bulletin correctly, the write off is approximately $32,000, and can be taken either as accelerated or 7-year depreciation.
Robert's correct. This falls under the same form 179 accelerated depreciation rules as business PCs, printers, etc. A guy won a suit against the IRS a few years ago, arguing the old 5 yr depreciation schedule was obsolete, since PCs and peripherals are valueless after a year or so.
Frankly, the Democrats are just making this a political issue to troll for the Green vote. For every Hummer depreciated there are thousands of work trucks being purchased due to the new rules. Same old liars...
It applies to ALL vehicles! If you use the vehicle for business purposes the cost of operation, etc. is deductible either by direct cost OR by a flat rate of ~ $.33/mi., whichever is greater. The pain in the ass if you also use it for personal use is that you must keep a 'contemporaneous log' of personal vs. business usage ... keeping accurate records to keep the two 'accounts' separate.
Yes and no. While it is true that any vehicle used for business qualifies for a tax deduction, there are special rules, and a greater depreciation deduction, for business vehicles weighing more than 6,000 lbs.
Businesses can accellerate the depreciation they take on a 6000+ GVWR vehicle. It was originally intended for farming pickups and Suburbans, etc. but now a alot of luxury SUVs meet the criteria.
Approximately 9/30/03 07:35, RichH uttered for posterity:
Yup, whether as a business owner or an employee. And if the job/business has special requirements that can be justified to the IRS vampires, you can buy a vehicle appropriate. e.g. a mining engineer with a nice GC, a public livery with an expensive limo, etc. Dunno if they will allow pimps to deduct the full cost of "necessary life style" vehicles.
You can do this for your personal vehicle even if you work for someone else, use it in a job related move, use it to look for work, etc. etc. And if you get a vehicle allowance that is less than the IRS allows, you can claim the difference as a deduct if you claim the allowance as income. Often worth it if your employer doesn't match the IRS rate. Restricted to travel that is not part of normal office commute, nor can your employer pay you for normal office commute without making that part as normal income.
Yeah. The IRS started cracking down on this in the mid 70's if memory serves. All of a sudden, companies who provided their employees with full use company cars had to begin figuring out ways around this without ticking off the employees. Some did it by charging a fixed monthly fee for the car, others did it by requiring that the cars be parked at an office, etc. etc. Then they moved to giving you an IRS form declaring the fair value for allowing the car to be kept at home and used for personal use.
To the OP: Don't overlook the word "business" in these responses. In addition to weighing 6000 lbs, it has to be used substantially as a business vehicle. If dual use, you can only write off the portion of the vehicle that is applicable to business.
In other words, no hauling the family around to church and soccer practice and expecting to get a big tax break because you bought a Hummer! (Of course, if you are creative, you could probably fudge somewhat and "convert" those family miles to business miles, but I refer you to our discussion under the "Towing" post regarding what is physically possible vs. what is precisely legal.)
Remember, a tax deduction only reduces your taxable income. Therefore, the true value of a deduction depends on what tax bracket you are in (10%, 15%, etc). Also, if you reduce your taxable income to the point where you don't owe any tax, you just kissed your non-refundable tax credits good-bye, like day care credit, child tax credit, and both education credits (hope/lifetime).
all that glitters isn't gold.....stick with jeep ;)
I am a service tech with my own company for 10 years and have to be on the road at any of the 24 hours of the day up here in Canada.
I 'need' a 4x4 to go to work, period.
My CJ7 is the 'perfect' service truck for me! All my tools can fit in the back and at 4:00 AM before the plows get out, which one contract had me doing 3 days+ a week for 9 years, I can still go anywhere with my
33x9.5 BFG Muds and Warn XD9000i winch on front.
I can write off all the repairs and fuel on it because I have a second 'family' vehicle, which is a Cherokee. My wife gets off at midnight some days, she needs a 4x4 too..
One contractor I work with that normally takes me in his van for the day had me follow him to all the service calls for 2 weeks this spring during a two week ice storm. I got paid for the 'needed' extra truck even.
I need the income deduction or as much of it as the accountant tells me to submit.
Every little bit helps. ;-)
When I have 0 net income, I get 'all' the tax credits. Too much income and I don't 'need' the tax credits so don't get them. That is how it works up here in Canada....
Mike
86/00 CJ7 Laredo, 33x9.5 BFG Muds, 'glass nose to tail in '00
88 Cherokee 235 BFG AT's
I own a small company, me, myself and I lately are the employees, but have had up to 7 'employees' or sub contractors working at one time in the past.
Just make sure you invite someone along to a fancy dinner or party first with a company name in your field behind them. They will bring a partner to as it is a 'business' social event. What you both do later is your own business. ;-) Entertainment deduction!
You can even split the check and both or all claim if you need the claim above the basic allowance given each year. Most folks don't pass the basic so just claim the basic with no questions asked.
Even taking a client and his wife on a 'business' trip to some exotic local can be a tax write off if you need that kind of drop in income to drop you a tax bracket....
That is what good accountants get paid the big bucks for, eh....
'Totally' legit!
So if you think about it like any local joke group type, or a 'Newfie' in our case might... well shit dere b'y... I have a $2000.00 tax write off for 'entertainment' expenses a year on me company dere, lard tunderin jaysus, may as well use er up, keep the receipts and then I can claim above it eh, b'y! ;-)
LOL!
Mike
86/00 CJ7 Laredo, 33x9.5 BFG Muds, 'glass nose to tail in '00
88 Cherokee 235 BFG AT's
MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.