Does anyone own their own company (corporation, professional association, etc.) and purchased your car through the company?

Does Uncle Sam care whether you buy a Toyota Camry or a 997TT for company use?

Thanks in advance.

 

Uncle Sam doesn't care, until you try & write it off. Then he cares Big Time!

 

You can pay yourself a car allowance and it doesn't matter what car you buy. I pay for a Navigator directly through my business as a company expense (registered to the company) and I also pay myself a car allowance separately every month for the turbo. Ask your tax consultant anyone who deals with taxes will know what schedule I'm talking about.

 

 

Depends on your business as well, if you can make the case that you meet clients and they expect a certain level of class from you (ie real estate agent is a good example) than a more expensive work car is completely reasonable. Harder to make that same case for a Porsche, but depends on the individual and his situation.

Also you are probably better off for the most part leasing your car in your name and then writing it off through the company especially if you use it as a daily driver.

Technically speaking 5 out of 7 days you commute to work so roughly speaking that’s 70% of the car that you can write off.

The rules change if you do a finance instead of a lease.

So just pay x amount of months directly from the company, and a couple out of pocket.

I'm not an accountant so don’t come after me if you get audited

In most cases though as long as all of your books are in order and you aren’t committing fraud a 70% write-off is acceptable. Especially if its really your only extravagance and creativity as far as tax write offs are concerned.

And lastly if you are really nervous just speak or work with an account that has done this for his clients in the past and for ones that have been audited so he has some experience under his belt when it comes specifically to this issue.

Could save quite a few pennies in the long run.

 

Not bad for a non-accountant. If you want to know more about this and dont feel like talking to an 'outside' accountant, i would be willing to help you. id have to check on it, but i could give you a low down on writing off for tax/company purposes. by the way, i just did graduate with a BS in accounting and am now in grad school.

 

If you can double check what I said in the previous post that would be great. I know that with write-offs there is a lot of gray area, I just wonder how far into the gray my views are

 

Out of curiousity, I have not done my taxes yet as they were extended until October which is right around the corner. Does this put a red flag with the IRS as far as being so late with taxes? I did pay them already how much I think I will owe.

 

The commute to work part is wrong. You can't write off your car if all you do is drive to and from work. In fact, that portion of your drive is excluded when you add up % usage of your vehicle. Every mile after you get to work and prior to your commute home is allowable as % usage. In other words, point A to point B does not count. Also, my understanding is that all you need is 50% business usage to deduct a vehicle.

My advice to all of you is get yourself a good "practicing" CPA. Don't seek internet advice on things that may come back to bite you!

 

I keep a log book in both cars and the SUV. All business miles are logged and I pay myself the highest per mile amount I can. Once every few months I put it all together on a spreadsheet and cut myself a check. It does not add up to squat when you consider the price of the cars.
Hummer sales boomed a bit when the IRS decided to give business's a write off for $100,000.00 a year and the Hummer qualified because of its GVW.

 

They didn't allow $100k a year specifically for a vehicle. They allowed $100k a year as a schedule 179 expense. The "SUV tax break" was actually intended to allow companies to make substantial tech investments and deduct them in one lump sum rather than depreciating them over several years. The loophole was that a vehicle with a GVWR of 6000lbs or more would qualify as "equipment".

 

Agreed, any equipment. I got wacked because I forgot to buy some CNC equipment last year. I could have used the deduction.

 

good thing that we don't have to pay any TAXES in Saudi Arabia

 

If you lease you write off, you buy you get no benefit and registering in your company name costs more for insurance in most cases and creates a corporate liability if you hit or kill someone avoid it or form a corp just for the car as most people do when they buy a boat or plane do.

 

Yea i will check for you as soon as i can.