This is truly a great video. Most tax guys have no clue how to simplify stuff down for the everyday person who isn’t studying the tax code all day, but you my friend do every time. Appreciate your content!
Im a Mobile Detailer. I pull my trailer with my personal truck everyday. I bought the truck out right. Im trying to figure this all out ... Thanks again for all u do to help us !! Aloha
I have to say that while this video has very good information concerning the vehicle deduction for your business on your tax return, there are a couple of items I would like to add. First, car payments are not an actual expense if you are purchasing the vehicle. However, the interest on those payments is. The flip side to this is if you're leasing the vehicle, then the whole payment is part of actual expenses. Secondly, if taking standard mileage deduction, depreciation is built into the mileage rate, meaning you cannot calculate depreciation separately. Mr. Dennis is correct, however, in stating that depreciation calculations are or should be built into the tax software you use. Thirdly, parking, tolls, interest only on vehicle purchases, and state/local property taxes are also all expenses that can be taken in addition to standard mileage deduction. They are also separate expenses for the actual expense deduction, if that method is chosen. But, as Mr. Dennis pointed out very clearly, you do have to choose which method is going to be most beneficial to you, and consulting your tax accountant or CPA is good advice in making that decision.
Where are u located? I'll stop by your office as well! Thank u for the added intel. ( i def feel, he's just not putting everything out, for purpose of levels) cmon , cant knock the provider for not showing all the tricks to the trade. I repect his levels of access to more i depth details. Its still very simple even for a boxer to understand. Appreciate all the added input concerning.
You mentioned “car payments” but my understanding is that only interest is deductible and the principal is not. The value of the vehicle is deducted with depreciation expense and that is why “car payment” is not deductible (only interest).
Exactly. Because to the business, the car is an asset and the loan is a liability. They go on the balance sheet, not the income statement lmfao. Any "accountant" should know this!
It's only the interest portion of the payment for a purchase, because the depreciation accounts for the principal. Under a lease is the full amount as you are paying for the use of the vehicle, not ownership. An expense.
@@nysteelhorsethat’s why you buy the car personally and lease it to the business for the entirety of the cost. The business insures it for business use, and all bases are covered.
I recently created my own LLC. I am in very active in my business and do my own bookkeeping. I am learning about taxes and what I can deduct and how. This was very informative.
Excellent work, Mr. Dennis. My only thought (as a small business owner and not a tax guru) is that the owner needs to look at the insurance side of things as well. For example, my homeowners/auto insurance company will not insure a corporate vehicle (that is, a vehicle in the name of the company.) When I looked for vehicle insurance under the corporate name, the rates I was quoted far exceeded any advantage that I may have gotten by simply using a personal vehicle for business and using the mileage method.
My insurance with Costco Connect allows you to use your business name on the title as long as you meet their pre qualifications. The cost difference between personal and company insurance was about $50 for 6 months coverage.
Great information! My accountant had me totally confused with the information of car deductions. You explained it clearly. Thank you. Keep up the good work.
I did this with my Chevy avalanche.. The sherrif was so upset when he couldn't tax me for the tickets on the LLC vehicle lmao.. I sold it in the long run and took no losses.
@@abegetsbuckwild They can.. but it doesn't go on YOUR ownership history.. it goes on the LLC's company vehicle history & EIN.. The sherriff called me in his frustration & I was like I will let the Operations Director know lol Plot twist: * I Am the operations Director *🤣🤣🤣
Man I needed this knowledge I have my own business in barbering I had my first barbershop for 6 years now I opened up a new and bigger shop I needed this
Setting up my business now. It will be 100% equipment dependent. Thank you for this video, it clarified a lot for me. I am trying to wrap my head around depreciation schedules and such.
@@karltondennisI Karlton what if chose actual instead of mileage and I keep the vehicle after the 5 year depreciation. and i decide to buy another brand new vehicle to have another 5 year depreciation on the new car can I still writing expenses from my old car and also expenses and depreciationon the new one??
Thanks Karlton, I learned a lot here and the bonus tip at the end to track both mileage and usage was very helpful. I feel like I have a better understanding of this now.
You can use the either the standard mileage or actual expenses method for a leased vehicle. However, if you use the standard mileage rate, you cannot switch to the actual expense method in a later year. If you use the standard mileage rate for a leased vehicle, the lease payment amount is not deductible. If you use the actual expenses method, leased vehicles are not depreciated. Instead, the business portion of the lease payment is deducted
So it's more advantageous to use the actual expenses method for a leased vehicle so you get half of the payment deducted in addition to all the other operating expenses? No depreciation available since you're leasing and not keeping the vehicle?
Since when do you write off a car payment? You take a depreciation deduction for actual and only the interest in the car payment. However if it is a leased vehicle then we could take the lease payment.
Since never! 🤣 Bill, this guy does not what he is talking about. the write off of a car purchased cash or through financing is called depreciation. Obviously, he does not know that.
This was totally on point.. I've been doing both sides of Accounting for over 10+ years and you are totally right. Plus I do UberEats and file my own taxes with TurboTax. What you had just explained in this video took me about an hr of re-reading that IRS Lines and understanding that, "OMG.. IRS is really letting us CHOOSE 1 of the 2". I'm very happy that I came across this video as it solidfied that I wasn't the only one thinking the samething too. LOLOL... Subscribed and can't wait hook up with you soon on your courses.
Thanks for the help! I just started a business and I have been kicking around purchasing a new car for this and your breakdown is nothing short of amazing and easy to understand. Thanks Karlton and I look forward to learning more form your channel!
Great video. However, I feel a correction is needed (based on my understanding) with regards to deduction of car payments AND depreciation. If you lease your car, you cannot deduct depreciation because you don't own your car. If you own your car, you can deduct depreciation BUT you cannot deduct the 'car note' payments - except for the interest paid on the car loan for that year. Again, thanks for your videos.🙏🏽
@@chrisboyce1 presuming you do not drive over 12,000 miles per year, leasing is better and easier option for tax deductions for your business. But if you plan to hold onto your car for over 3 years and / drive a lot of miles, outright purchase and claiming mileage or depreciation is better.
KD you the real MVP for this bro! I just started a fitness business and I use my truck to drive to clients over 50% of the time! keep these videos coming bro!!
I am not the type of person that comments in videos, but I will do it this time. The information was valuable and you just won a new subscriber, I am here taking notes and I hope I can take the best decisions to open my first LLC. Thank you Karlton.
At 13:15 you said actual vehicle costs vs vehicle mileage is on top of vehicle depreciation. Unless I'm missing something (and anyone please correct me if I'm just wrong here), I think there is some misinformation here. In the article you read just a few seconds prior, it says the IRS includes depreciation into the mileage deduction already. So I would assume the choice is either taking the mileage rate or taking all the actual expenses plus the calculated depreciation. Now if this is correct, in your example if you took the later method, it would equate to a $17,200 deduction versus $9375 from vehicle mileage. Also to note, this only covers the straight line depreciation (SLD) method for vehicle's used up to 50% for business. Anyone using their vehicle over 50% could use the more aggressive MACRS method. And finally, if the person uses the actual expenses + deprecition method, they must continue to use that method every subsequent year after whereas if the person uses mileage could change to actual the following year.
Thank you! I'm just starting my llc journey and your videos have been a great help. Big question here is EVs. I have a Tesla. I obviously dont use gas, but could I add in my electricity into the list of actual expenses?
Thank you for consistent good content that is easy to absorb and retain for us people who have to listen a few times and take extra notes. The detail you provide is great and its detail like being in class and then like examples. Thank you again.
Great video, I purchase a mustang then when I got my LLC I purchase a mustang Shelby Ferrari and Mustang Gt I put it all under my LLC and gain more money 💰 after tax return
What about the insurance side of using your personal vehicle for business purposes. Every time I ask about this with the insurance company, they say you cannot use your vehicle for a business.
Absolute kudos you always give the best advice and the way you articulate it is so comprehendible...phenomenal is probably the only word that can describe your lessons...Great speaker🏆
Might be a stupid question, but im going to ask anyway... What if I have a full-time job, and two side businesses? Do I need to track mileage for each of the side businesses separately?
Algorithm doing its magic I wanted to know the answer to this question and you came through. Thanks for the precise information broken down into Golden nuggets.
15:10 what if you donate the vehicle to carangel or a church or even the classical radio station, then there would be no profit and a donation to a 501c. Im guess since the vehicle had already been claimed as a deduction then their would be no tax benefit but a business, say a trail running athelete or door dash driver, could get a new vehicle every 2 to 4 or even 5 years and have huge tax savings to the point of basically never paying. Especially the delivery contractors out the the irs hired 87000 agents to go after.
This was incredibly informative. I can’t believe I didn’t know this before now. Will be applying this information moving forward. Subscribed with appreciation.
Hello, thank for clear explanation. The question is - if I a independent contractor can apply for tax deduction on my vehicle, if I purchase it before I start my business but right now I use for business ?
I've got an interesting scenario for you. My business is in the automotive industry with a focus on show cars. I have a show car, currently it is in my name. This car since last year has been used 100% for business, it is taken to car shows to promote my business, generally at a booth for my business. I usually spend a few thousand each year to make the car stand out even more and bring in more automotive to my brand. Since this car will likely never be sold or gotten rid of should i sell it to the business? Am i better off writing off all the upgrades and maintenance done on the car? There are barely any miles put on the car each year. Next question would be the trailer i bought specifically to haul my car to and from shows. This is also used 100% for the business and has been since it was purchased. Can i claim miles on a trailer? And the last factor is the tow vehicle. It is used about 70% for business as i have another car for personal use. Should i claim mileage on the tow vehicle? Am i able to claim miles on one car and actual on another? This one's even got my accountant scratching her head. Thanks for any advice. Love the video and I'm subscribed for more content like this.
You have to own your pink slip and to sell the car you have to remove it from the LLC. Many insurance companies have no LLC clauses depending on the State
Love it. Where are you located? The delivery is what seperates you vs many other "advisors". You're also who I've recently recommended to peers, begining their journey on more indepth financial insights + strategies. Thank you.
If the car is not registered under LLC - we cant use those payments for LLC. In order to register the car under LLC it takes lot extra effort and interest rates are high
IF You trade in the car after 5 years, does that count as "Selling" the car for the IRS. Also there is no "profit" as it lost value not gained value compared to purchase price
Thanks for these tax info content, im your new sub now. Almst gave up learnin about business coz of funds en low incom, I wont stop I wil stand til the coming day that I open a private limited company my hope is high and so is my ideas mixd with nothing buh hard work to turn a cent into a dream.
Question- so wouldn’t leasing the vehicle be better so you can avoid paying depreciation taxes when selling the car? Also, do these tax strategies apply when leasing a vehicle?
This was a really helpful video. Although you didn’t say much about using the vehicle for more than 50% of the business and the IRS expecting you buy commercial auto insurance. This is something I am not very clear on.
I am a bit confused. The definition of the mileage deduction implies that it includes assumptions for depreciating. So you wouldn't count depreciation on top of mileage, at least that's my understanding. If I'm wrong I'd love to be corrected. Also, someone already mentioned this, but I believe the rules are different between leasing and purchasing the car. Lease payment counts towards actual, OR depreciation + loan interest counts to actual deduction, but not principle. Pretty sure these are important details.
Great video! Very informative! How should I go about determining if vehicle was used for over 50% of business use? Aswell what are some suggestions for documenting business use?
Q? Does the vehicle need to be brand new or can it be a used car and also can it be a rebuilt/salvage title on it? Does it even matter as long as I use it for business purposes like the information you shared on this video
let's say I lease the vehicle in the name of the LLC, and use the actual expense method, how do I treat my actual payments and bookkeeping? For example, the car payment is $400/month. Does the LLC pay that $400 per month and then at the end of the year I check my actual usage (the 50% minimum) then total all my car expenses and multiply the percentage?
All my work vehicles are depreciation right offs. I only want my LLC to protect my personal assets. If you're a LLC with one car, you don't need an LLC. Screw milage. 6% rate , WOW. Hire a CPS attorney to do your paperwork. Depreciate! Everything! Or lease!
I may be wrong, but actual miles (to be written off) must be actual business miles. When you covered mileage, you seemed to not reinforce that unlike when you covered actual.
Would you still have to pay taxes on the depreciation you took if you took the car out of service from the company, but still owned it? Specifically, giving the vehicle to a child.
This was a very informative and helpful video I have I'm dealing with the same questions as I purchased a vehicle in my bit in my personal name and I have been using it for business purposes ever since
So you determine that your vehicle is used more then 50% simply by tracking your mileage? What if you use your car to scan documents at a location and things, as in using your car like an office for mobile businesses. How does that work?
So it ultimately doesnt matter if the car is under your name or the LLC. as long as you use it for business 50% or more of the time. Unless i zoned out and missed something.
At 13:15 it says the two methods of tax deductions are on top of the depreciation, but what I’m reading elsewhere is that you cannot claim standard mileage if you’ve taken 179 deduction. Am I wrong?
your channel is an amzaing resource. Thank you for that. 1) Assume I drove my car 10K miles last year and 4K miles of were bussiness related. I cannot use the actual method because it was less than 50%. However, can I use the "standard mileage" method? 2) In the "standard mileage", is the depreciation incorporated or can it be added on top if it?
Great job but a few items are misleading in this video. He is double counting the “depreciation” by taking the car payments and depreciation of the vehicle over 5 years deductions. Should basically exclude the principal payments of the loan if taking depreciation. Another item is that he didnt talk about how the “actual” treatment is affected when using the cash vs accrual basis methods
Great question! If you choose the actual method in the first year the vehicle is placed in service you have to stick with that method throughout the life of the vehicle. If you choose the standard mileage method you can switch back and forth depending on what is more beneficial.
What if you trade in the car for your new car for the business? Would that work in the same way you avoid taxes when selling one home add take the gains to put towards the next?
Lets say I bought a used vehicle that KBB listed as Typically costing $10,500 but was sold to me at $6,000. If I sign the title in my business name and and use it for my business, I could essentially get the deduction at the $10,500 / 5 years, correct? If that being so then I may in theory get the car for free or even make money off the deduction...No?
![14 Biggest Tax Write Offs for Small Businesses! [What the Top 1% Write-Off]](http://i.ytimg.com/vi/5YggWhLeckM/mqdefault.jpg)
This form of learning should be taught early in High school. To have an Entrepreneur mindset is vital component in achieving success. Great Job!
This is truly a great video. Most tax guys have no clue how to simplify stuff down for the everyday person who isn’t studying the tax code all day, but you my friend do every time. Appreciate your content!
my experience in dealing with "professionals" like lawyers and accountants says that most would have no interest in helping you eliminate them!
I love this channel ❤❤❤
I hope there is a class where you coach up and coming tax preparers
Thanks Karlton ! Quick update for Jan 2023 . The IRS have increased the standard mileage rates from 62.5 to 65.5 cents per a mile.
Im a Mobile Detailer. I pull my trailer with my personal truck everyday. I bought the truck out right. Im trying to figure this all out ... Thanks again for all u do to help us !! Aloha
Same bro I’m a detailer too just getting started I’m trying to figure out how to log my car 😂
I have to say that while this video has very good information concerning the vehicle deduction for your business on your tax return, there are a couple of items I would like to add. First, car payments are not an actual expense if you are purchasing the vehicle. However, the interest on those payments is. The flip side to this is if you're leasing the vehicle, then the whole payment is part of actual expenses. Secondly, if taking standard mileage deduction, depreciation is built into the mileage rate, meaning you cannot calculate depreciation separately. Mr. Dennis is correct, however, in stating that depreciation calculations are or should be built into the tax software you use. Thirdly, parking, tolls, interest only on vehicle purchases, and state/local property taxes are also all expenses that can be taken in addition to standard mileage deduction. They are also separate expenses for the actual expense deduction, if that method is chosen. But, as Mr. Dennis pointed out very clearly, you do have to choose which method is going to be most beneficial to you, and consulting your tax accountant or CPA is good advice in making that decision.
Where are u located? I'll stop by your office as well! Thank u for the added intel. ( i def feel, he's just not putting everything out, for purpose of levels) cmon , cant knock the provider for not showing all the tricks to the trade. I repect his levels of access to more i depth details. Its still very simple even for a boxer to understand. Appreciate all the added input concerning.
You mentioned “car payments” but my understanding is that only interest is deductible and the principal is not. The value of the vehicle is deducted with depreciation expense and that is why “car payment” is not deductible (only interest).
This guy is a hack. I only can assume he worked an H&R Block one year and now thanks he is a pro.
Exactly. Because to the business, the car is an asset and the loan is a liability. They go on the balance sheet, not the income statement lmfao. Any "accountant" should know this!
It's only the interest portion of the payment for a purchase, because the depreciation accounts for the principal. Under a lease is the full amount as you are paying for the use of the vehicle, not ownership. An expense.
@@nysteelhorsethat’s why you buy the car personally and lease it to the business for the entirety of the cost. The business insures it for business use, and all bases are covered.
I recently created my own LLC. I am in very active in my business and do my own bookkeeping. I am learning about taxes and what I can deduct and how. This was very informative.
Excellent work, Mr. Dennis. My only thought (as a small business owner and not a tax guru) is that the owner needs to look at the insurance side of things as well. For example, my homeowners/auto insurance company will not insure a corporate vehicle (that is, a vehicle in the name of the company.) When I looked for vehicle insurance under the corporate name, the rates I was quoted far exceeded any advantage that I may have gotten by simply using a personal vehicle for business and using the mileage method.
You just gave me some insight
My insurance with Costco Connect allows you to use your business name on the title as long as you meet their pre qualifications. The cost difference between personal and company insurance was about $50 for 6 months coverage.
It’s a depreciating asset and there’s a wealth of write off for that
Keep automobile in your name lease it to your company and charge your company first insurance and payment
@@takodashabbael8794 Hmmmmmmm.
Great information! My accountant had me totally confused with the information of car deductions. You explained it clearly. Thank you. Keep up the good work.
I did this with my Chevy avalanche.. The sherrif was so upset when he couldn't tax me for the tickets on the LLC vehicle lmao.. I sold it in the long run and took no losses.
Wait what? they can't ticket you?
@@abegetsbuckwild They can.. but it doesn't go on YOUR ownership history.. it goes on the LLC's company vehicle history & EIN.. The sherriff called me in his frustration & I was like I will let the Operations Director know lol
Plot twist: * I Am the operations Director *🤣🤣🤣
Man I needed this knowledge I have my own business in barbering I had my first barbershop for 6 years now I opened up a new and bigger shop I needed this
Setting up my business now. It will be 100% equipment dependent. Thank you for this video, it clarified a lot for me. I am trying to wrap my head around depreciation schedules and such.
Glad it helped! Look forward to seeing you in my event that kicks off Monday. www.thetaxfreewealthchallenge.com/join-thechallenge
@@karltondennisI Karlton what if chose actual instead of mileage and I keep the vehicle after the 5 year depreciation. and i decide to buy another brand new vehicle to have another 5 year depreciation on the new car can I still writing expenses from my old car and also expenses and depreciationon the new one??
Thanks Karlton, I learned a lot here and the bonus tip at the end to track both mileage and usage was very helpful. I feel like I have a better understanding of this now.
You can use the either the standard mileage or actual expenses method for a leased vehicle. However, if you use the standard mileage rate, you cannot switch to the actual expense method in a later year.
If you use the standard mileage rate for a leased vehicle, the lease payment amount is not deductible.
If you use the actual expenses method, leased vehicles are not depreciated. Instead, the business portion of the lease payment is deducted
So it's more advantageous to use the actual expenses method for a leased vehicle so you get half of the payment deducted in addition to all the other operating expenses? No depreciation available since you're leasing and not keeping the vehicle?
Since when do you write off a car payment? You take a depreciation deduction for actual and only the interest in the car payment. However if it is a leased vehicle then we could take the lease payment.
Since never! 🤣 Bill, this guy does not what he is talking about. the write off of a car purchased cash or through financing is called depreciation. Obviously, he does not know that.
You’re the man, I look forward to working with you. Thank you for all the information. I just created my LLC and received my EIN number.
This was totally on point.. I've been doing both sides of Accounting for over 10+ years and you are totally right. Plus I do UberEats and file my own taxes with TurboTax. What you had just explained in this video took me about an hr of re-reading that IRS Lines and understanding that, "OMG.. IRS is really letting us CHOOSE 1 of the 2". I'm very happy that I came across this video as it solidfied that I wasn't the only one thinking the samething too. LOLOL... Subscribed and can't wait hook up with you soon on your courses.
standard mileage includes depreciation
Yep. Not sure what he was talking about depreciation on top of standard/actual deduction
Thanks for the help! I just started a business and I have been kicking around purchasing a new car for this and your breakdown is nothing short of amazing and easy to understand. Thanks Karlton and I look forward to learning more form your channel!
Greatest Tax video on the web, please continue
Great video. However, I feel a correction is needed (based on my understanding) with regards to deduction of car payments AND depreciation. If you lease your car, you cannot deduct depreciation because you don't own your car. If you own your car, you can deduct depreciation BUT you cannot deduct the 'car note' payments - except for the interest paid on the car loan for that year. Again, thanks for your videos.🙏🏽
But you'd be depreciating against the lease payment so it works out like depreciation anyway
So is it better to lease a car for your business ?
@@chrisboyce1 presuming you do not drive over 12,000 miles per year, leasing is better and easier option for tax deductions for your business. But if you plan to hold onto your car for over 3 years and / drive a lot of miles, outright purchase and claiming mileage or depreciation is better.
Best content on UA-cam man
KD you the real MVP for this bro! I just started a fitness business and I use my truck to drive to clients over 50% of the time! keep these videos coming bro!!
Thanks!
Your information and channel has simplified my understanding of my LLC
I am not the type of person that comments in videos, but I will do it this time. The information was valuable and you just won a new subscriber, I am here taking notes and I hope I can take the best decisions to open my first LLC. Thank you Karlton.
At 13:15 you said actual vehicle costs vs vehicle mileage is on top of vehicle depreciation. Unless I'm missing something (and anyone please correct me if I'm just wrong here), I think there is some misinformation here. In the article you read just a few seconds prior, it says the IRS includes depreciation into the mileage deduction already. So I would assume the choice is either taking the mileage rate or taking all the actual expenses plus the calculated depreciation. Now if this is correct, in your example if you took the later method, it would equate to a $17,200 deduction versus $9375 from vehicle mileage. Also to note, this only covers the straight line depreciation (SLD) method for vehicle's used up to 50% for business. Anyone using their vehicle over 50% could use the more aggressive MACRS method. And finally, if the person uses the actual expenses + deprecition method, they must continue to use that method every subsequent year after whereas if the person uses mileage could change to actual the following year.
You are absolutely correct. I had to scratch my head when he said depreciation can be taken on top of the standard/actual deduction.
All the information I need before turning my Uber Driver account to LLC. Wow! So informative and very well explained. 👍🏼👍🏼👍🏼
Im thinking of doing the same. How is it going for you?
@@ciscolicious87_32 working on getting my business bank checking and savings account set up right now before switching my tax info on Uber
Thank you for your simplicity in breaking down the Tax Code.. it is very helpful and appreciated😊❤
Thank you! I'm just starting my llc journey and your videos have been a great help. Big question here is EVs. I have a Tesla. I obviously dont use gas, but could I add in my electricity into the list of actual expenses?
Very well explained even for someone like me who is not English fluently, thank you for your awesome video !
Thank you for consistent good content that is easy to absorb and retain for us people who have to listen a few times and take extra notes. The detail you provide is great and its detail like being in class and then like examples. Thank you again.
Great video, I purchase a mustang then when I got my LLC I purchase a mustang Shelby Ferrari and Mustang Gt I put it all under my LLC and gain more money 💰 after tax return
What about the pros & cons of leasing a vehicle for a business???
As an accountant, not a tax accountant, you did an amazing job of breaking this down!! New subbie here❤
What about the insurance side of using your personal vehicle for business purposes. Every time I ask about this with the insurance company, they say you cannot use your vehicle for a business.
OMG - how do I like this video more than the like button? That was an amazing explanation of how this work!
Absolute kudos you always give the best advice and the way you articulate it is so comprehendible...phenomenal is probably the only word that can describe your lessons...Great speaker🏆
Might be a stupid question, but im going to ask anyway... What if I have a full-time job, and two side businesses? Do I need to track mileage for each of the side businesses separately?
Algorithm doing its magic I wanted to know the answer to this question and you came through. Thanks for the precise information broken down into Golden nuggets.
My questions is about commercial car insurance when using your personal vehicle to transport paying clients.
15:10 what if you donate the vehicle to carangel or a church or even the classical radio station, then there would be no profit and a donation to a 501c. Im guess since the vehicle had already been claimed as a deduction then their would be no tax benefit but a business, say a trail running athelete or door dash driver, could get a new vehicle every 2 to 4 or even 5 years and have huge tax savings to the point of basically never paying. Especially the delivery contractors out the the irs hired 87000 agents to go after.
The paying taxes on the sell of the car depreciation if u sell it is greatttttt content
This was incredibly informative. I can’t believe I didn’t know this before now. Will be applying this information moving forward. Subscribed with appreciation.
Hello, thank for clear explanation. The question is - if I a independent contractor can apply for tax deduction on my vehicle, if I purchase it before I start my business but right now I use for business ?
Hi Karlton, thanks for all your advice. For this particular topic you did not address leasing a.vehicle as opposed to purchasing under the business
I've got an interesting scenario for you. My business is in the automotive industry with a focus on show cars. I have a show car, currently it is in my name. This car since last year has been used 100% for business, it is taken to car shows to promote my business, generally at a booth for my business. I usually spend a few thousand each year to make the car stand out even more and bring in more automotive to my brand. Since this car will likely never be sold or gotten rid of should i sell it to the business? Am i better off writing off all the upgrades and maintenance done on the car? There are barely any miles put on the car each year. Next question would be the trailer i bought specifically to haul my car to and from shows. This is also used 100% for the business and has been since it was purchased. Can i claim miles on a trailer? And the last factor is the tow vehicle. It is used about 70% for business as i have another car for personal use. Should i claim mileage on the tow vehicle? Am i able to claim miles on one car and actual on another? This one's even got my accountant scratching her head. Thanks for any advice. Love the video and I'm subscribed for more content like this.
You have to own your pink slip and to sell the car you have to remove it from the LLC. Many insurance companies have no LLC clauses depending on the State
Love it. Where are you located? The delivery is what seperates you vs many other "advisors". You're also who I've recently recommended to peers, begining their journey on more indepth financial insights + strategies. Thank you.
Great video, always helpful for new LLC owner, starting a non-emergency medical transportation business..
Question. How do I finish paying off my car with my LLC? Or how do I go about selling it to my LLC to finish paying off the loan?
Your help is greatly appreciated. There is a wealth of information in your videos and they are well put together and thought out. Thank you
Karlton… you’re the best tax support on UA-cam… hands down. Thank you 🤝
How do you write off the entire car in the first year like you mentioned. Can you please make a video on it for us.
Good information, as a new businesss owner I needed this ...thank you
You’re videos have helped me so much in getting business up and running. Great stuff.
If the car is not registered under LLC - we cant use those payments for LLC.
In order to register the car under LLC it takes lot extra effort and interest rates are high
You are brilliant. Thank you for sharing this. You make learning the content easy and enjoyable.
IF You trade in the car after 5 years, does that count as "Selling" the car for the IRS. Also there is no "profit" as it lost value not gained value compared to purchase price
Thanks for these tax info content, im your new sub now. Almst gave up learnin about business coz of funds en low incom, I wont stop I wil stand til the coming day that I open a private limited company my hope is high and so is my ideas mixd with nothing buh hard work to turn a cent into a dream.
Question- so wouldn’t leasing the vehicle be better so you can avoid paying depreciation taxes when selling the car?
Also, do these tax strategies apply when leasing a vehicle?
Thank You for your Knowledge and Information, you made it make sense for me to fully understand, I took some amazing notes…!!! Stay Blessed…!!!
Just….thank you. Seriously. Also shared the vid with two other people
This was a really helpful video. Although you didn’t say much about using the vehicle for more than 50% of the business and the IRS expecting you buy commercial auto insurance. This is something I am not very clear on.
Man, your videos are so easy to understand, as a brand new LLC holder I really appreciate it. Thank you!
I am a bit confused. The definition of the mileage deduction implies that it includes assumptions for depreciating. So you wouldn't count depreciation on top of mileage, at least that's my understanding. If I'm wrong I'd love to be corrected. Also, someone already mentioned this, but I believe the rules are different between leasing and purchasing the car. Lease payment counts towards actual, OR depreciation + loan interest counts to actual deduction, but not principle. Pretty sure these are important details.
I agree, you CANNOT claim depreciation as well as mileage, or car payments, you can only claim the interest.
Great video! Very informative! How should I go about determining if vehicle was used for over 50% of business use? Aswell what are some suggestions for documenting business use?
Can I use a 2016 car?
Q? Does the vehicle need to be brand new or can it be a used car and also can it be a rebuilt/salvage title on it? Does it even matter as long as I use it for business purposes like the information you shared on this video
let's say I lease the vehicle in the name of the LLC, and use the actual expense method, how do I treat my actual payments and bookkeeping? For example, the car payment is $400/month. Does the LLC pay that $400 per month and then at the end of the year I check my actual usage (the 50% minimum) then total all my car expenses and multiply the percentage?
How to transfer a vehicle on personal name with loan on car into a LLC. that is most important
All my work vehicles are depreciation right offs. I only want my LLC to protect my personal assets. If you're a LLC with one car, you don't need an LLC. Screw milage. 6% rate , WOW. Hire a CPS attorney to do your paperwork. Depreciate! Everything! Or lease!
Great video my Man. You made it simply as all out doors. Keep on doing what you do bro
Awesome, informative, and easy to understand information! How many cars can a car rental LLC write off in one year?
Excellent information, I highly recommend your channel. Great video!
If your business usage is below 50%, you can still use the actual method. You cannot take 179, bonus or accelerated depreciation only straight line.
I may be wrong, but actual miles (to be written off) must be actual business miles. When you covered mileage, you seemed to not reinforce that unlike when you covered actual.
Paying extra for commercial insurance plus the business property taxes you will pay every single year will eat up most of the benefits.
You’re one intelligent young man.I am proud of you.Thank you for your great educational videos.
Ok so quick question. Would it be better to lease the car from yourself vs putting it under the business?
Would you still have to pay taxes on the depreciation you took if you took the car out of service from the company, but still owned it? Specifically, giving the vehicle to a child.
Does it need to be in your business name or can it be under your personal name as the owner of the LLC okay too?
This was a very informative and helpful video I have I'm dealing with the same questions as I purchased a vehicle in my bit in my personal name and I have been using it for business purposes ever since
So you determine that your vehicle is used more then 50% simply by tracking your mileage? What if you use your car to scan documents at a location and things, as in using your car like an office for mobile businesses. How does that work?
the mileage rate INCLUDES DEPRICIATION...YOU CANT TAKE BOTH....I'm confused..l think I'm right...
So when is the best time of year to buy a vehicle under ur business
Thank you so much I just subscribed to your channel. Thank you for looking out for us wanting to do it right ! Stay blessed!
So it ultimately doesnt matter if the car is under your name or the LLC. as long as you use it for business 50% or more of the time. Unless i zoned out and missed something.
At 13:15 it says the two methods of tax deductions are on top of the depreciation, but what I’m reading elsewhere is that you cannot claim standard mileage if you’ve taken 179 deduction. Am I wrong?
your channel is an amzaing resource. Thank you for that.
1) Assume I drove my car 10K miles last year and 4K miles of were bussiness related. I cannot use the actual method because it was less than 50%. However, can I use the "standard mileage" method?
2) In the "standard mileage", is the depreciation incorporated or can it be added on top if it?
Great job but a few items are misleading in this video. He is double counting the “depreciation” by taking the car payments and depreciation of the vehicle over 5 years deductions. Should basically exclude the principal payments of the loan if taking depreciation. Another item is that he didnt talk about how the “actual” treatment is affected when using the cash vs accrual basis methods
Great video. I really appreciate everything said in it. Thank you so much. 🙏🏾🙏🏾
Can you go back and forth each year depending which method gets you best deduction? Or once you choose you have to stay with that method forever?
Great question! If you choose the actual method in the first year the vehicle is placed in service you have to stick with that method throughout the life of the vehicle. If you choose the standard mileage method you can switch back and forth depending on what is more beneficial.
Great video! Thank you for researching and putting together this compare/contrast. This is what I needed.
What if you trade in the car for your new car for the business? Would that work in the same way you avoid taxes when selling one home add take the gains to put towards the next?
How do you avoid paying taxes on the depreciation of the vehicle when you need to upgrade your car? Do I donate it instead of selling it?
I could donate the car and use that as a write off? would that equal it out?
How do you determine what percentage is business use?
Is it by mile?
Time based like hours or days used?
Lets say I bought a used vehicle that KBB listed as Typically costing $10,500 but was sold to me at $6,000. If I sign the title in my business name and and use it for my business, I could essentially get the deduction at the $10,500 / 5 years, correct? If that being so then I may in theory get the car for free or even make money off the deduction...No?
Thanks man you taught me so much in this video I need to hire you