I am starting my own investment business and I need to buy a work truck. What are the tax advantages? Can I buy a truck and write off the price? What should I do>>???
You will depreciate the cost over what the IRS considers the life of the vehicle. Say, for instance, that you pay 30,000 for the vehicle and it has a life of seven years. You would deduct $4285.71 (30,000 divided by 7 years) from your taxes each year for seven years.
You can also take accelerated depreciation if business use is > 50%.
There are also annual limits on vehicle depreciation based on type of vehicle and when it was placed in service. Some of the larger trucks are not subject to the depreciation caps. Might look at IRS publ 946 on depreciation.
if the auto is in the name of an llc can one then write off the whole amount? or does will it still need to be depreciated? and how is the situation different if the auto is leased???
if the vehicle is leased you can just write that off as a business expense. There are also situations where you would make it a capital lease and in effect it would look like an installment purchase I believe.
You will depreciate the cost over what the IRS considers the life of the vehicle. Say, for instance, that you pay 30,000 for the vehicle and it has a life of seven years. You would deduct $4285.71 (30,000 divided by 7 years) from your taxes each year for seven years.
Just curious. What kind of investment business requires a "work truck", rather than a business owned vehicle such as a car?
You can also take accelerated depreciation if business use is > 50%.
There are also annual limits on vehicle depreciation based on type of vehicle and when it was placed in service. Some of the larger trucks are not subject to the depreciation caps. Might look at IRS publ 946 on depreciation.
If you purchase a business vehicle, how is milage handled? Is that part of the depreciation? Can you deduct repairs/gas?
If memory severs correctly, you take depreciation plus one of the two options:
1) Take a set amount for the amount of miles you drive. The IRS sets the amount.
2) Deduct all expenses such as gas and repairs.
The IRS recommends that you keep track of both of the two above and use whichever one will deduct more.
if the auto is in the name of an llc can one then write off the whole amount? or does will it still need to be depreciated? and how is the situation different if the auto is leased???
Im studying to be a CPA i think joecrane is right
if the vehicle is leased you can just write that off as a business expense. There are also situations where you would make it a capital lease and in effect it would look like an installment purchase I believe.