Buying New Truck A Business Expense?

Wensdy

is buying a new truck considered a business expense and is there a tax writ-off. what category do you classify it under in quickbooks?

Kingfisher

Check with an accountant to be sure but I think if it weighs over 5000# you get to take it all off in the year you buy it if not you have to take a little over 5 years. I use My personal truck and take a milage deduction, I think it is like 38c a mile now. I basicly paid for the truck in 2 years doing this and it 7 years old now. Just a different way to do it.

Susan Betz

YES. Talk to your accountant. We expense everything possible.

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KillerToiletSpider

I lease mine and deduct the lease payments. A lease is a liability not an asset.

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mahlere

trac leasing is the way to go....

smellslike$tome

I AM NOT AN ACCOUNTANT SO YOU MUST VERIFY ANYTHING I SAY WITH A QUALIFIED PROFESSIONAL. Now that the disclaimer is out of the way I will say yes you should be able to deduct the full amount. I had been told by someone about a year ago that you could deduct vehicle purchases under "section 179 expense deduction". I do not have a regular accountant but back in the summer I paid one for an hours consultation because I was a little concerned that maybe I was getting off track on some tax issues. Turns out I was fine but one of the questions I asked him was whether or not it was true that I could deduct the entire purchase price of a new vehicle in the year it was purchased as a section 179 deduction rather than going through the depreciation process. He says YES! Woo hoo that means that the cost of my new truck which arrives Friday can be fully deducted from this years gross revenue when I go to file my taxes. BUT I AM NOT AN ACCOUNTANT OR QUALIFIED IN ANY WAY TO GIVE TAX ADVICE. CONSULT YOUR LOCAL TAX PRO!

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L. B. Condulet

Be aware that when you sell that vehicle, what ever money you receive from the sale will be treated as income and you will be required to pay income tax on the sale. Naturally you pay taxes on income received on the sale of any business equipment, but by accelerating the depreciation and not taking it over the course of 5 years, you could have a substantial tax "hit". At the end of the day, your tax liability would be the same, but it's a matter of timing. You enjoy the full deduction now, but pay for it later.

L. B. Condulet

It's very easy, its a 6100 expense. At year end when you import it into Turbo Tax or whatever, you then single it out and treat it according to what ever method you have chosen.

thom

Add in a couple of other issues. For it to be a business vehicle it must be used exclusively for business. If you stop at the grocery store on the way home from work to pick up a gallon of milk (the IRS will ask you this if an audit comes up), then it's a personal vehicle. If you don't have another vehicle that is licensed, insured, and available, it's a personal vehicle.

If it's a business vehicle you may expense it (section 179) or depreciate it over 5 years. How you do this will depend on this years profitability and projected profitability over the next 4 years.

If it's a personal vehicle you must keep a regular log of usage. You can then reimburse yourself for the business mileage driven at a rate fixed by the IRS (changes yearly) or you can maintain a detailed record of all expenses and expense a percentage of those expenses that is consistent with the percentage of business use (see regular log in the first sentence of this paragraph). In any event, you must clearly document your business use buy day, destination, distance, and function.

TimNJ

Double check, the deduction applies to vehicles falling in a certain GVWR.
I used the deduction in '03

jmic

You mean Truck leasing .

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Joe

jmic

You mean Truck leasing .

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Joe

mahlere

no.... i mean trac leasing

L. B. Condulet

You mean truck leasing.

mahlere

no..dammit...i mean trac leasing...

i'm changing your username to systematicnimrod

L. B. Condulet

<---- How'd you do that?

mahlere

hey...i got mad skills

dirt diggler

oh ok - yeah - truck leasing

makes sense

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ultimatetouch

My accountant told me that purchasing it is cheaper then leasing in the long haull. I plan on keeping my vehicle for five years and only using for business.

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L. B. Condulet

My ex-wife is a CPA and she tells me the same thing.