Truck.....Tax Season

[Sunrise]

Wondering if someone could help out here. Last year was my first season in the bus......bought a truck, but since the co. didn't have any credit history at the time put it under my name. I have been paying for it out of my personal account until the co. is ready and able to pay for it. It was 100% used for business and want to deduct it..........can I do this???? If so, should I do it under personal taxes or company taxes???

BTW- company is paying it this upcoming season, but will still be under my name. Should I leave it or see if there is someway to get it put under the company name?

thanks.

[lw4259]

keep truckin

First as long as you kept records on business usage your ok. If you havent already open a business account. Write a check from your personal account to the business then write a business check to the creditor. I do the same its a pain but so would be getting audited by the irs.

[Scaper-S2k]

Don't deduct it at 100%, that will throw up a red flag for the IRS.


Now if you have many biz trucks, and purchased under the biz name, then yeh, 100% will be okay. Assuming they are true commercial vehicles.

[Phil Nilsson]

It was 100% used for business and want to deduct it..........can I do this???? If so, should I do it under personal taxes or company taxes???

YES ... do it ... don't worry about IRS ... it's a legit deduction so take it ...

Also in company name or otherwise this is not important. It is what it is ... a business expense.

Phil

[Scaper-S2k]

Phil, you are dead wrong on this. The vehicle is in his name, not the company name. Deducting 100% with throw up a red flag waving....."AUDIT ME PLEASE".

I have had a couple different accountants, my current one is retired from the IRS. Seriously. They all say the same thing.

I forget what the 'magic' percent is, but it's not 100%.

Even if you do use it 100%, they will question it unless you have many vehicles, all used solely for work, and in the biz name.

Do you have multiple work vehicles?




I'm NOT saying you can't deduct 100% of the vehicle, but in your situation, it might throw up a red flag. We own multiple work trucks and dump trucks, so those can be 100% deducted. But if it's just a regular pickup truck in your personal name, I wouldn't try for a 100% deduction.

[Sunrise]

scaper- i only have the one truck and it is used for 100% business. I have the mileage book made for tracking usage on company vehicles.

thanks for the comments so far.

[Phil Nilsson]

An IRS auditor is like the state police ... dumb fools going 65mph in a 65mph zone put their foot on the brake ... even when not speeding

[Woody04765]

Good analogy Phil. Yes you can deduct the truck on your taxes. You don't need to pay for it from your business to write it off. Just keep track of everything that you use it for. Every business expense that you incur can be written off. I would caution you about taking all 100% of it off right away though. Why not spread it out over a year or two to add a little cushion for next year as well.

[dave_n_mulberry]

i suggest you get a qualified accountant or cpa to do your books.... his $1000.00 fee is a whole lot less than a $15,000.00 penality.

[jfishenter]

Something to consider... If you claim 100 % of your truck, that is, you claim the cost, or payments on it, plus all cost associated with it, such as fuel, ins. etc., if you sell it, you will have to claim what ever you sold it for as income. Then you'll have to pay taxes on that amount. You may won't to consider just claiming mileage. I'ts 33 cents per mile.

Just something to think about.

[lw4259]

good point about declearing income on a sold truck. I bet most new business can bury that since expenses run over income. An with depreciation for new equipment higher can also off sets things too.

I am not an accountant but a good bookkeeper or accountant will in the long run pay for its self.

Just my opinon

Lee

[Scaper-S2k]

What I was speaking about was not really deducting the entire truck all at once. I meant that whatever portion is deducted per year, you only use a percent of that. So if he deducts $4k per year, he then uses a percent of that $4k.

For some reason, I'm thinking the "red flag" is over either 87% or 93%. Can't recall. That is if it is your only truck. I don't think any one can truly say that if it is their only truck, they have never used it to go to the store, or anything. And that is exactly what the government thinks too. That's why I said use a percent other than 100%.

[edrenckh]

I'd deduct it, 100%.... Scaper, you are losing money if you don't.

Doesn't matter whos name it's in.

I lease my truck to my business. Lease payment equals the depreciation. I net to zero, my company pays all expenses, insurance, diesel, washes, seat covers, etc. All this in addition to the lease payment.

And when I drive my other truck, I get reimbursed by the company at .36 per mile.

When in doubt, take the deduction. If it's a legitimate business expense, look em right in the eye and take it.

[Phil Nilsson]

I'd deduct it, 100%....

Take mileage on your wife's car as well ... how many times has she run errands on behalf of your biz? ...

Take the deductions ... ((((you are entitled to)))) ... nobody is sitting down at the IRS waiting for your tax return to show up ... they have bigger fish to fry ...

Phil

[Scaper-S2k]

Originally posted by edrenckh
I'd deduct it, 100%.... Scaper, you are losing money if you don't.

Doesn't matter whos name it's in.

I lease my truck to my business. Lease payment equals the depreciation. I net to zero, my company pays all expenses, insurance, diesel, washes, seat covers, etc. All this in addition to the lease payment.

I never said I personally didn't deduct 100% for my true company vehicles. I also didn't say it couldn't be done.

It is a well known fact that taking a 100% deduction on your only truck for a business is a RED FLAG. Ask any real tax accountant.

You can also deduct toothpaste and deoderant because you can say you wanted a white smile and to smell good! Doesn't mean it won't throw up a red flag with the IRS.



Percents of vehicles is one of the first things looked at for possible audits. If you have a car and a truck. The IRS will not believe you NEVER used that truck for some type of personal use.


I know all about the leases, I have a few. But leases are different when deducting 100% than if the truck was a purchase. I deduct 100% of leases, and 100% of purchases. But I have dump trucks, and true commercial work trucks. If I got auditted, I can show that I also own a car and a personal truck as well. Others can't.