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It is, but only for the first year. After that first year, under the example I stated, a person would be paying $59,200 but only able to deduct $18,000. Section 179 or the bonus depreciation gives a person a sudden impact on their taxes but the later years are bad. Keep in mind if the person trades in that auto the next year and gets something else, then their tax basis on the new vehicle is a lot less than what would be paid for it. Example: $70k bought in 2016 and used the $52k depreciation. In 2017 they traded it for another and gave $10k difference. Instead of getting to depreciate $70k again, they can only start to depreciate $28k ($18k basis plus $10k difference). Also can only use Section 179 in 2017 on the $10k difference. Section 179 can only be used on new monies.
Over the long run, the vast majority of the time using the standard mileage rate gives a person a better deduction unless the auto gets horrific gas mileage or the auto is driven very little.
quote:Originally posted by mogley98
That is a pretty substantial tax savings quote:Originally posted by neacpa
Cannot write off entire amount if cost is over $25,000. Section 179 write off is limited to $25,000 on an auto if it meets the GVWR requirements. Then, if the auto is new and not used, a person can deduct 1/2 of the remaining cost as "bonus depreciation" and then take 20% of any remaining basis as normal depreciation. Example: Cost of new vehicle is $70k. Deduct $25k of Section 179 giving a remaining basis of $45k. Bonus depreciation can be $22,500 giving a remaining basis of $22,500. Typical first year depreciation on a vehicle is 20% so that means $4,500 of normal depreciation. Total depreciation on this vehicle is $25,000 + 22,500 + 4,500 = $52,000. But then they have only $18k to depreciate over the next 4 years. Next year they would be paying the $10,800 and only deducting around $5,700. Third year even less depreciation and continuing after that. That is assuming the vehicle is used 100% business and no personal use to it at all. Unless the boss' wifes vehicle is used for the business, then he should not be deducting any expenses for it.
quote:Originally posted by 1911a1-fan
complete first year tax write off if over a certain weight
my boss buys a new one every year, alternating years with his wife getting an suv, gmac zero interest still runs 900 a month each vehicle, but beats the hell out of paying it to the irs
I have A neighbor that every year or so purchases a brand new Chevy truck loaded. Does not have any use for a truck, drives it to coffee shop daily to show off. I just dont get it? why have a big ole gas hog that is hard to get into, huge to wash, just to get coffee? I watch a thousand empty pickups go by daily, what status symbol? what then? I have a 90 pickup to pick up stuff and run to the dump couple times a year, do I need a truck that costs 60 K for that? maybe manly status symbol ?
quote:Originally posted by westernMDhunter
I don't worry about what anyone else drives. Its their money, they work for it so who am I to say what they should buy.
agree 100%
I just have not figured out how to afford one myself
How much has it changed, around 70,000 + dollars. Still a nice looking truck but I'd bet the 74 would look pretty darn good with 15K worth of customizing.
Maybe the customizing would be a full write off in one year. Even better.[:D] or Convert it to electric and get a tax credit?
How much has it changed, around 70,000 + dollars. Still a nice looking truck but I'd bet the 74 would look pretty darn good with 15K worth of customizing.
Maybe the customizing would be a full write off in one year. Even better.[:D] or Convert it to electric and get a tax credit?
quote:Originally posted by mjrfd99
Seriously thinking of a restoration on the 7.3 crew when the time comes.
What would 25K do for her?
"Hello, Diesel Brothers......"
Restoring or customizing? Diesel brothers isn't in the restoring business, they are in the customizing business! big lifts, big axles and big turbos! I guarantee it would be badass!
Comments
Over the long run, the vast majority of the time using the standard mileage rate gives a person a better deduction unless the auto gets horrific gas mileage or the auto is driven very little.
quote:Originally posted by mogley98
That is a pretty substantial tax savings quote:Originally posted by neacpa
Cannot write off entire amount if cost is over $25,000. Section 179 write off is limited to $25,000 on an auto if it meets the GVWR requirements. Then, if the auto is new and not used, a person can deduct 1/2 of the remaining cost as "bonus depreciation" and then take 20% of any remaining basis as normal depreciation. Example: Cost of new vehicle is $70k. Deduct $25k of Section 179 giving a remaining basis of $45k. Bonus depreciation can be $22,500 giving a remaining basis of $22,500. Typical first year depreciation on a vehicle is 20% so that means $4,500 of normal depreciation. Total depreciation on this vehicle is $25,000 + 22,500 + 4,500 = $52,000. But then they have only $18k to depreciate over the next 4 years. Next year they would be paying the $10,800 and only deducting around $5,700. Third year even less depreciation and continuing after that. That is assuming the vehicle is used 100% business and no personal use to it at all. Unless the boss' wifes vehicle is used for the business, then he should not be deducting any expenses for it.
quote:Originally posted by 1911a1-fan
complete first year tax write off if over a certain weight
my boss buys a new one every year, alternating years with his wife getting an suv, gmac zero interest still runs 900 a month each vehicle, but beats the hell out of paying it to the irs
pay in 10,800.00 write off 70k +
I don't worry about what anyone else drives. Its their money, they work for it so who am I to say what they should buy.
agree 100%
I just have not figured out how to afford one myself
Think I'd be looking for a nice used truck, unless it was a write off but think there are limits?
Found this video:
Old vs New: 1974 vs 2017 Ford F-250 - How Much Has The Super Duty Changed in 43 Years?
How much has it changed, around 70,000 + dollars. Still a nice looking truck but I'd bet the 74 would look pretty darn good with 15K worth of customizing.
Maybe the customizing would be a full write off in one year. Even better.[:D] or Convert it to electric and get a tax credit?
Thought 74,000 would at least be a 350 dually but just a 250 hd?
Think I'd be looking for a nice used truck, unless it was a write off but think there are limits?
Found this video:
Old vs New: 1974 vs 2017 Ford F-250 - How Much Has The Super Duty Changed in 43 Years?
How much has it changed, around 70,000 + dollars. Still a nice looking truck but I'd bet the 74 would look pretty darn good with 15K worth of customizing.
Maybe the customizing would be a full write off in one year. Even better.[:D] or Convert it to electric and get a tax credit?
cool video thanks
What would 25K do for her?
"Hello, Diesel Brothers......"
Seriously thinking of a restoration on the 7.3 crew when the time comes.
What would 25K do for her?
"Hello, Diesel Brothers......"
Restoring or customizing? Diesel brothers isn't in the restoring business, they are in the customizing business! big lifts, big axles and big turbos! I guarantee it would be badass!
I am trying to make mine last if I don't wreck it. It is an 02 7.3 with 32500 actual miles.
Sweeet...that is a highly desired truck!!