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Posted: 6/6/2003 1:56:26 PM EDT
I have several questions that a few of you more informed members may know the answer to. I would like to get a truck for that I would like to get for work. I would use it excusively for work. I have another vehicle available to me for personal use. I know you can get a $25,000 tax break for getting a truck over 6000lbs. However, I am employed by a company. I earn about 10k outside moonlighting. 1. Is it ok to deduct the full amount if I buy a truck. 2. Can you get the full amount even if you buy the truck mid-year.
Link Posted: 6/6/2003 2:12:48 PM EDT
I'm no tax advisor but if you buy the truck specifically for the business you can deduct it and all the expenses associated with it. But I believe the truck will have to be depreciated over time. The annual maintence and fuel would be fully deductible.
Link Posted: 6/6/2003 2:16:50 PM EDT
First, you have to be engaged as a business, paying taxes as a small business organization. That is a HUGE tax hit, trust me, I'm there. If you are not a legitimate business, you might want to carefully consider this. If you are moonlighting without reporting income, you could be in trouble. Wait a few months as the law will probably change allowing a FULL depriciation in the first year instead of the 3 year accelerated depriciation. If you sell the vehicle, you will then pay capital gains on the vehicle depending on its FMV. And you "loophole" haters out there, relax. The purpose is to relieve the capital losses incured by small businesses that typically over-utilize such a resource...a small business will typically see 75k miles per year on such a vehicle. If I hear any complaints, remember, some of us SBO's pay 45% TAX on our receipts.
Link Posted: 6/6/2003 2:18:04 PM EDT
[Last Edit: 6/6/2003 2:24:43 PM EDT by ARDOC]
Swire, that much I got. But this is a loop hole that they put in to spur sales and save the SBOs some money. You can take a FULL $25k deduction the first year. Plus 20% of the remainer. For an expensive truck it could be like $30k. I just need the specific rules for this before I buy the truck! Keith, I do report the moonlighting. They dont take anything out and just give me the full amount. I get a 1099-Misc after the tax year. I was told since it was just me, I am technically a small business and I could do this. The qyestion is can I deduct the amount from my regular job as well? It is a small business and I do drive a lot for work. Oh its not 45% its like 56%! After the state and city get their share!
Link Posted: 6/6/2003 2:28:37 PM EDT
You can depreciate the entire amount the first year if you wish,or depreciate it over time. I bought a new F250 last year, I am incorporated, I depreciated the entire amount of the vehicle in one year. It's really a very nice benefit for those who are self employed or own a business. I haven't seen the new tax reform numbers, but rumor is that this deduction will be increased in the amount allowed.
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