Taxes-Van right off

[Lyman]

Would it be crazy to lease a truck mount and van every year and right the whole price off your taxes ever year. Why I am asking is my friends does siding and leases two trucks ever year and rights the whole price of the trucks off his taxes ever year. Lets say he leases them for 1200 a month for both and at the end of the year he rights of 80,000.

 

[Chris A]

I'm not an accountant, but here's the way mine explained it to me. First, you cant 179 a lease like you can a purchase, you can only deduct the payment. Second, the 179 is a one time up front deduction in advance of your depreciation, so the IRS wants you to keep the vehicle at least five years. When I was thinking of flipping my back up truck, my CPA said it wouldn't be smart because I'd have to pay back the deduction I took from the 179.

 

[KevinD]

Would it be crazy to lease a truck mount and van every year and right the whole price off your taxes ever year. Why I am asking is my friends does siding and leases two trucks ever year and rights the whole price of the trucks off his taxes ever year. Lets say he leases them for 1200 a month for both and at the end of the year he rights of 80,000.

Lease payments are a 100% write off but 1200 X 2 X 12 months would be $28,800

 

[Shane Deubell]

Would it be crazy to lease a truck mount and van every year and right the whole price off your taxes ever year. Why I am asking is my friends does siding and leases two trucks ever year and rights the whole price of the trucks off his taxes ever year. Lets say he leases them for 1200 a month for both and at the end of the year he rights of 80,000.

No, he writes off $1200 month.

Which is tricky in it self, if you are in a 36% tax bracket or a 10% tax bracket these numbers have different meanings on a 1x purchase.

 

[Newman]

Yup, crazy.

Do you really need the write off?

 

[SMRBAP]

The only person to best answer that question is your cpa - if you don't have one, get one, and a good one. You don't necc have to pay them their $150-250 / hr rate to add up 356 gas receipts, 5621 invoices etc - just give them your categorized totals and have them nail it for you, and then buy a few hours of time to begin to create an immediate plan for next year, and a long term plan for a few years out.

The things you don't know alone will pay for their services an likely put $ back into your pocket.

One fine example for me - fuel taxes. He get's me back the road and use taxes on every gallon my extractors (and other fuel powered tools) consume. That one item there pays me to use his services, I think one year to the tune of $3k-ish.

Keep in mind even the best cpa's hands are tied sometimes in regards to planning - 6-7 things I was hoping to make a decision on this year are on hold because we don't know what is going to happen with tax code just yet on state and fed levels.

 

[John Olson]

Section 179 does allow you to write the whole thing off but you have to keep it and you don't get to claim it any other year if you claim all of it. Also you can claim some,half or all of it but you need a good CPA to tell you what you can or cannot do and you cannot take a double negative. If you did not profit 80 grand you can't take a 80 grand deduction.

P.S. asking questions on Mikeysbaord that can get you thrown in jail if you screw up following the answers might not be the best course of action

 

[Lyman]

My buddy makes over 500,000 a year so he needs big right offs. Yes I need 10,000 more in right offs. I mite have to look at a truck and truckmount every couple years for the extra right offs.

 

[John Olson]

You really need a GOOD CPA section 179 sounds really great but it might hurt you in the long run if your not careful. Also there are limnitations on the vehicles that you canm claim. Pretty surre it has to be a 3/4 ton or bigger to be considered but I dont rermember the exact GVW. Ask around and find the best CPA you can afford and go sit down with them. Will be very wise money spent.

 

[Shane Deubell]

Have to agree with john, have to talk with a professional on the many,many details involved.

The original question was wrong but i cannot give any specific advice on the subject.

 

[SMRBAP]

John, It's 6,000 lbs.

Originally nicknamed the farmers write-off. I had heard talk that might be changed at some point to deter Dr. Whatever from purchasing a >6000 SUV for himself, another for the wife, another for the 16 yo crumbsnatcher, and being able to use the deduction/s.

There are so many more tax codes "slated to possibly change" in the recent few years, it's damn near impossible to have a 3-5 yr plan anymore that covers the gamut.