Did you know that you can write off a vehicle you use over 50% for business and it doesn’t have to be purchased in the businesses name? Well under the tax law if your vehicle is over 6,000 lbs (large SUVs and trucks), you can write off the full value of the vehicle as long as you use it 100% for business. If you use it 90% for business, your write off is 90% of the vehicles value.
What if the vehicle is less than 6,000 lbs?
If the vehicle is less than 6,000 lbs you can only deduct up to $18k in the first year.
This strategy isn’t something that can be implemented every year by trading in your vehicle (trade-ins will impact the calculation of the deduction). It must be a new/used vehicle purchase (not lease). Once you sell the vehicle, this will create a tax event, so always consult or communicate with your advisor as you are buying and selling business assets.
Consult with your tax advisor before implementing this strategy. Tax planning should take into account your entire situation.
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