SUV Tax Deduction
I have a question no CPA seems to be able to answer. There is a new SUV Tax that allows you to write off a huge percentage if it's used for business and is over 6000 GVW
www .detnews.com/2002/autosinsider/0212/18/c01-38875.htm
How exactly does this work? Do I purchase the vehicle for full price and when the tax season rolls around, deduct it and I'll recieve a refund check from the government to pay it off, or is this really even an advantage?
Thank you for your time.
[ Edited by StewartChicago on Date 02/17/2004 ]
If you run a business, you can buy an SUV over 6000lbs GWR. you can write off the purchase of the SUV on your taxes under Section 179. Unless you're doing REI full-time without any source of income, you won't be able to deduct 100% of the price. Maybe you can do 80% of the purchase price - so you will deduct 80% of the price you paid for the vehicle from your taxable income in 2004. In a nutshell, that's it. For more details and applicability to your situation, you need to talk to your accountant. Tell them than until end of this tax year(or sooner, if Congress closes this loophole before year-end) 6000lbs+ SUV counts as qualifying property under Section 179 deduction.[ Edited by compwhiz on Date 02/17/2004 ]
http://www.thecreativeinvestor.com/ViewTopic14063-23-7.html
I have done this twice and it is very good to offset higher incomes like my doctor wife. I have bought a navigator and a crew dually in the past 3 years. We where audited the first year and the SUV (as well as the whole return) passed with flying colors. the key to claiming it as a business expense is to keep a driving log with it to prove it is for business. We have 4 cars between us so the IRS assumed it was used for work only.
I read the link att. to this post. Let me make sure I understand this. I buy a $30,000 SUV which I use for REI 50% of the time. I'm new in REI so my profits aren't very large yet, but I can take my tax break for this year, and even apply (save)some of it for my next year's income? I can even apply this tax break to offset my husband's salary who works a regular job?
Thanks,
Ginnie
Ginnie,
There are a few restrictions involved. First the vehicle has to be owned by the business and used by the business. Secondly, your business has to be eligible to take Section 179 deductions. Lastly, the deduction can not create a taxable loss for you. You are only allowed as much deduciton as you have income to offset.
This is my understanding of the rules, but I may be wrong. Consult a licensed tax professional in your area for specific details.
Thanks Dave