How do you define that percentage as business use? I mean, if you're an uber driver, I suppose it's pretty straightforward. However, what if you're a real estate investor and you use that vehicle for 'driving for dollars', meeting prospective clients (whether buyers or sellers of property), hitting up open houses, just whatever...anything having to do with that type of activity. Would it be a mileage recording of all of those trips? Seems like it would be quite tedious and open to fraudulent documentation. Also, does the vehicle have to be first owner, or can a pre-owned vehicle be used to take advantage of section 179 and the bonus deduction? Thanks!
@@ryanshannon7703 I would think a Realtor would easily be able to say over 50% was used for business for the reasons you stated. It would require an audit for that to be scrutinized, and you'd just want to tally and document your work-use each week or month to not forget the days and approx. miles you used it for work.
50 percent is the threshold for qualifying for 179, but you can only depreciate the fraction of the car that is used for business. If you only used the car 50% for business then you can only depreciate 50 percent of the car's value.
I loved the music. It was fine. If you did not like it, watch a different video. He was here to offer information, not give you a massage and soothe your day. People like you are the problem with our overly sensitive world. Are you the type to ask for a manager at McDonalds? FOR SURE hahahaha. Jesus!
@@gusk23 28 people agree with him, and your the only one not too. Looks like your the outlier buddy. He didn’t say anything negative, just a suggestion to improve his videos.
@@evan5262 LOL and over 500 liked it as it is. Enjoy the message and move on. The world these days is critical of too much. I love his loud music. He can make his videos however he likes. Who told you that it NEEDS improving? YOU? Who says loud music is not the right way? YOU? Over 500 love it as is. YOU are the minority. Yet you seem to think he owes you something lol. You are FOR SURE a Democrat. Weak, opinionated, and think your "feedback" is valuable when in reality not a single person cares you exist. Find someone who has "the music volume" to your liking because a vast majority love it.
Great video! Here's why: not everyone explains the book value scenario of "resaling" a vehicle (a couple years later) that has been deducted 100% using the Section 179 Deduction.
Nice video. Can I put the vehicle into service at the end of December, drive one business trip, park it for the rest of the year, thus creating 100% business use for 2020?
Great video. Would hope to see a little bit more of the math to show how much the car "actually" ends up costing in that year in order to decide if it is a good financial decision to reach for a larger, more expensive car or not.
Yes I agree. I am very confused. If I wanted to do this in real life I go online Order a Model X say 179 and they take 25K off? Then when I do my taxes I get a check somehow for the rest?!? It sounds like something is missing.
@@JasonRamosNJ You deduct 100% of the vehicle price from your expenses (as long as the vehicleis over 6,000 lbs). So, for example, if your business made $500,000 and your expenses were $200,000, you pay taxes to the government on $300,000 profit (which is appr. 33% of $300,000 = $100,000), your net profit after taxes would be $200,000 for that year. Now, if we use the same example, but you purchase a vehicle for $100,000, your expenses for that year will be $300,000 instead of $200,000, so you pay taxes on $200,000 instead of $300,000 ($200,000 x 33% = $66,000). So that way you save appr. $34,000 in tax payments. Again, those are just approximate numbers.
Just to clarify, the vehicle weight does NOT have to be greater than 6,000 lbs to claim S179 deduction. But if you want to claim full bonus depreciation (100% remaining basis then it does have to be greater than 6,000 lbs GVWR S168). For example, say you buy a Tesla Model Y for $60k (for 100% business use). It’s GVWR is less than 6,000 lbs so the max depreciation in 2020 is $10,000 (S179) + $8,000k bonus depreciation = $18,000 in Year 1. That’s a tax savings of $6,660 assuming a 37% tax bracket. If instead you buy a Tesla Model X for $120k (100% business use). It’s GVWR is greater than 6,000 lbs so the max write off in 2020 is $25,000 (S179 for SUVs) + $95,000 (S168 100% Bonus Depreciation)= $120,000 in Year 1. That’s a tax savings of $44,400 assuming a 37% tax bracket. The remaining basis of the vehicle is $0 because it’s been fully depreciated. So bonus depreciation is a great way for businesses to recapture the costs associated with investing to grow the business through capital expenditures. www.investopedia.com/terms/l/luxury-automobile-limitations.asp bradyware.com/business-vehicle-deductions-2020/
Great video, thanks so much for sharing! I have a few questions. 1) If I plan to use the car for ride sharing (Uber and/or Lyft), does that count as "for business"? 2) For the at least 50% for business requirement, is that for the lifetime of ownership or does that phase out at some point? (say after X amount of years)
50% for the year of purchase. so if i buy a car in 2020, at least 50% of its use in 2020 must be for “business”. after u receive ur tax deduction for 2020, there is no minimum business usage because the whole point of section 179 is to help businesses deal with deappreciation.
Thx for rhe excellent explan! I have a Q. What happens in the 2scenarios below :1. Lease paym If you prepay the lease 2. You put a large downpf/the car w/mtly paymts. How much can you deduct in the year of purchase and placed in service
Great video: Have a couple of follow up questions: #1 Does your net income have to be equal or more than the purchase price of the car? For example, if I make $50k net income from my business, can I use these depreciation techniques to fully deduct a $130k+ Mercedes G Wagon? #2 Would I have to pay off the vehicle up front or can I finance?
I like how simple & clear your explanation sounds. Thanks! I'm teaching (so, W2!) but I wanna do uber & Lyft again (side hustle, as they say) & I'm looking at optimizing the write-offs. What else should I be looking at? Thanks ahead...
I see that you mentioned the tax savings for the IRS. Can you touch a little bit about how you would still be liable for state taxes in California on that income of 75,000 in your example of a vehicle purchase.
Great Video Nguyen. Thanks a lot for taking time out of your day to educate us. I got a question for you, let’s say my business has 50k of income on a calendar year and I want to buy a car for 90k and use 40k of personal assets to pay cash for the vehicle. How this scenario would play out? Would the book Value be 40k or I would still have the book value at 0$?
Great video! What if I bought the vehicle last year and didn’t use 179. With the example you used in your video. How much would I be able to write off? Also can I do this for leases and financed vehicles?
at the end, you said if we decided to sell the car in the later year, we would be hit with a large tax bill. how can that be when the car is depreciating every year there after?
Can you elect section 179 year one of a vehicle purchased for business use and then in year 2 plus every year thereafter take the mileage deduction as an ordinary business expense? This would be for a Turo type of business
What would happen if you take section 179 and bonus depreciation and say you wrecked that vehicle in year three. I'm assuming they would recapture some of those savings. Of course you would be purchasing another vehicle. Would the new vehicle under whatever the current 179 rules were cancel out the recapture owed
I think you are wrong on the 6k LBS rule. You can deduct regular passanger vehicle but it has to be used for business at min. 50% and you are caped at 11,500 if I remember correctly
You buy the car lets say Model X. Zero down. Do you get 25K towards the purchase or do you have to make a year of 1500 a mo payments then tax time get 25K and how do you "depreciate" the rest of the car who pays it? Does govt give you a check at year end to give to Tesla?
What if you run a small residential care home for the elderly with a maximum of 6 residents and I want to buy a normal passenger vehicle over 6000 pounds? Would the $25,000 cap still apply since not all of the residents would need to leave at the same time, and it would also be used for things like getting groceries and supplies?
If a vehicle is under 6k pounds, but you order it and have some parts replaced at the manufacturer like say, a plastic bumper with a steel bumper, front and back, then it passed the 6k pound mark, would that still qualify? They are regular options offered by the manufacturer but not sure how it works
Hi, Nquyen. Is it possible to add any depreciation to car that I bought and sold at the same year when I put it into the service? Which way is better to go? one way is to deduct all purchase price with license/taxes taxes plus depreciation or another one just calculatee the difference between purchase- selling price? Please, advice.
Just came across your vid it was very helpful...just had a question what if the vehicle is under the 6,000 lbs? Would the business owner be eligible for the 18k deduction?
Is there something like this business coaching or management training? Like if I were going to hire a coach for a year and we had a contract. Is there guidelines for taking a dedeuction this year in that case?
Hi Nguyen, can you deduct sections 179 agains ordinary income. If someone has a loss on schedule C. But, they purchase a truck under their business and already has a loss they cannot take it agains their W-2 taxable income correct?
What about the costs of building an office for a self employed business in the basement of a private home? Can I use the 179 deduction or the bonus depreciation it?
Wondering about removing from inventory and placing into service? Say you sell computers or cars and you had some in inventory from previous year/s , then place it into service in current year? Is that considered "purchased" ? Also, can I sell the business an asset(backhoe) to be used in business and be 179ed ? Thanks
Great information just started small business . Question 🙋🏾♀️ so with a small business loan my question is what cars can I write off like Mercedes G wagon or jeep renegade that II’ll use it for business ??
Gross Vehicle Weight Rating is the maximum load the car can carry. the actual vehicle weight (curb weight) can be much less than 6000#. GVWR = curb weight + payload. Like you said, it's for commercial vehicles like trucks and vans and buses that may be light when empty, but can carry a lot of weight. i'm pretty sure the X5 doesn't weight 6000# empty, but GVWR for the X5 and many SUVs and pickups are over 6000#
i can not hear what you said about the depreciation when skipping the first year. also, can you explain about the disposing of the asset like vehicle. thank you
Thanks for the info. I really appreciate it. So it I were to buy an electric truck that costs 89k. I would get all that money back when I file my taxes? Sorry if it’s an ignorant question, I don’t know too much about tax code.
Thank you so much for the video! If the small business owner uses Section 179 to purchase a qualifying SUV and plans on keeping the SUV for 5-7 years. What happens when you sell the SUV after such time/ the SUV's useful life?
I'm only 19 so I am probably wrong. But I would assume you pay capital gains tax on whatever the sell price was. Not sure if long term capital gains tax applies to this as it does with stocks...
I’m getting mixed dates saying that the section 179 and bonus depreciation is ending in the end of 2021 or end of 2022. Can you explain which date it is?
Great video! I have one question however, I have a few bitcoins that im thinking of selling. Could I use my short term capital gains profit to buy an suv and write if off completely under Section 179? I have a small carpentry business at the moment.
Hi, thanks a lot for the video. If an individual who is sole proprietor sells a business asset in which he took both section 179 and bonus deduction would require to recapture the gain at ordinary rate (the individual'r tax rate) if that asset is sold at a gain in future?
8:28.. if the car is under 6,000 pounds, can't you deduct $18,500 and take bonus depreciation for the rest? Didn't the Job Act make this change? 100% for 2022 and 80% for 2023 etc?
I bought a Ford Transit 350 Cargo Van and I am getting conflicting information regarding the weight being “gross vehicle weight” and “gross vehicle weight rating” Ford sent me a screenshot showing “gross vehicle weight” of 9500 but it also shows on my door sticker “gvwr” 9500 so I’m just confused how much the car actually weighs so I can write off the full cost rather than partial. Any thoughts ?
Does bonus depreciation and section 179 have to be on the first year of a new business? Or the first year of a new purchase? If that’s the case, can you use it every year?
Say I buy a $50k qualifying vehicle and take the full 100% deduction in 2021. Then I sell it in 2022 for $40k so the $40k is added to my 2022 income. But then in 2022 I also buy another qualifying vehicle for $40k. Can I use the section 179 again to fully write off that $40k replacement vehicle I purchased and offset the $40k added income from selling the first one?
What happens if (before factoring in the vehicle) you only owe $7,000 in taxes at the end of the year? Should you depreciate the entire amount of a $50,000 car or just $7,000 of it to make your tax liability for that year ZERO?
HUH, what do you mean by "normal" depreciation?? I purchase it at the end of 2018 Dec and put into use the next year. Does this mean I skip the 179 depreciation?
I use a Honda fit for my IT business and I removed the backseat to place tools there. This vehicle only weighs 3k pounds however it is used for my business about 90% of the time. Can I buy a newer version of this car and write it off 100%? Great video thank you!
I'm a tax newbie with a question. Say you have a small business that has $40,000 owed in IRS taxes. If you finance a truck, say for $50,000, does that mean you can use section 179 to wipe your tax debt to $0?
The write off is not free money though right? Like it's just 75k you don't pay taxes on. It's not like I buy a 75k x5, then on my taxes write off 75k and they give me a 75k refund check.
Great video. I am a landlord which used to owned 6000lbs Landcruiser but I gifted to my son early this year. By taken section 179, can I have my son sell it back to me at market price $25000 thus I can write it off the taxable rental income? Please advise. Thank you much.
I just don’t understand why is section 179 taken before bonus depreciation? Buy $50000 but have $20000 income = just take 100% depreciation to have -30000 income?
One thing I think people should talk about: is this a good financial decision? Paying the money back on income when you sell is a new angle that I did not know about. Also a lot of times people are desperate for tax deductions, or they spend more money in search of tax deductions without realizing they are not saving the total amount in actual cash. Meaning if their tax rate is 45% on income, and they "write off" a 100k in income. They are only really saving 45k. So in a sense, they spent 65k to save 45k from the government.
One important think I forgot to mention is that the asset has to be used at least 50% for business! Any less than that, no sec. 179 deduction.
How do you define that percentage as business use?
I mean, if you're an uber driver, I suppose it's pretty straightforward. However, what if you're a real estate investor and you use that vehicle for 'driving for dollars', meeting prospective clients (whether buyers or sellers of property), hitting up open houses, just whatever...anything having to do with that type of activity. Would it be a mileage recording of all of those trips? Seems like it would be quite tedious and open to fraudulent documentation.
Also, does the vehicle have to be first owner, or can a pre-owned vehicle be used to take advantage of section 179 and the bonus deduction?
Thanks!
@@ryanshannon7703 I am also curious
@@ryanshannon7703 I would think a Realtor would easily be able to say over 50% was used for business for the reasons you stated. It would require an audit for that to be scrutinized, and you'd just want to tally and document your work-use each week or month to not forget the days and approx. miles you used it for work.
50 percent is the threshold for qualifying for 179, but you can only depreciate the fraction of the car that is used for business. If you only used the car 50% for business then you can only depreciate 50 percent of the car's value.
How do you prove that you used it for over 50% for business? Do you have to have some kind of documentation?
Straight to the point no extra talking, staying on top, great information!
I appreciate the video, but if I could offer a small critique nix the music, it was a bit too loud and distracting. Thanks.
I loved the music. It was fine. If you did not like it, watch a different video. He was here to offer information, not give you a massage and soothe your day. People like you are the problem with our overly sensitive world. Are you the type to ask for a manager at McDonalds? FOR SURE hahahaha. Jesus!
@@gusk23 28 people agree with him, and your the only one not too. Looks like your the outlier buddy. He didn’t say anything negative, just a suggestion to improve his videos.
@@evan5262 LOL and over 500 liked it as it is. Enjoy the message and move on. The world these days is critical of too much. I love his loud music. He can make his videos however he likes. Who told you that it NEEDS improving? YOU? Who says loud music is not the right way? YOU? Over 500 love it as is. YOU are the minority. Yet you seem to think he owes you something lol. You are FOR SURE a Democrat. Weak, opinionated, and think your "feedback" is valuable when in reality not a single person cares you exist. Find someone who has "the music volume" to your liking because a vast majority love it.
Music is annoying.
I totally agree, this guy seems very knowledgeable so I wanted to stay and listen but I was really distracted by the music.
Great video. Finally a simple summarization of this tax law.
Glad it was helpful!
Great video! Here's why: not everyone explains the book value scenario of "resaling" a vehicle (a couple years later) that has been deducted 100% using the Section 179 Deduction.
Concise and well articulated. Thanks for educating us!
So if I purchased a truck for my detailing business in 7/2021 can I do this this upcoming tax year?
Can you take the mileage deduction the following year?
How do you prove the vehicle is for business and not buying it as a personal vehicle.
So I make my monthly payments but what happens or how does it work with what I’ve paid for the year on payments. Does that account towards taxes?
Nice video. Can I put the vehicle into service at the end of December, drive one business trip, park it for the rest of the year, thus creating 100% business use for 2020?
I also would like to know the answer to this
I’m not a tax pro but I believe the answer is YES. So long as you use in the year you purchased it.
Yes
Since vehicles are usually at the best price in Nov/Dec this is what anyone trying to buy an asset would want to do for their business…why overpay
No
You stated “ more than 6000 pounds” for vehicles. What if it’s exactly 6000 pounds. Does it qualify?
Thanks for the info, been looking for a new vehicle for my small business. 2022 Volvo S90 Polestar here i come.
Great video. Would hope to see a little bit more of the math to show how much the car "actually" ends up costing in that year in order to decide if it is a good financial decision to reach for a larger, more expensive car or not.
Yes I agree. I am very confused. If I wanted to do this in real life I go online Order a Model X say 179 and they take 25K off? Then when I do my taxes I get a check somehow for the rest?!? It sounds like something is missing.
@@JasonRamosNJ You deduct 100% of the vehicle price from your expenses (as long as the vehicleis over 6,000 lbs). So, for example, if your business made $500,000 and your expenses were $200,000, you pay taxes to the government on $300,000 profit (which is appr. 33% of $300,000 = $100,000), your net profit after taxes would be $200,000 for that year. Now, if we use the same example, but you purchase a vehicle for $100,000, your expenses for that year will be $300,000 instead of $200,000, so you pay taxes on $200,000 instead of $300,000 ($200,000 x 33% = $66,000). So that way you save appr. $34,000 in tax payments. Again, those are just approximate numbers.
Just to clarify, the vehicle weight does NOT have to be greater than 6,000 lbs to claim S179 deduction. But if you want to claim full bonus depreciation (100% remaining basis then it does have to be greater than 6,000 lbs GVWR S168).
For example, say you buy a Tesla Model Y for $60k (for 100% business use). It’s GVWR is less than 6,000 lbs so the max depreciation in 2020 is $10,000 (S179) + $8,000k bonus depreciation = $18,000 in Year 1. That’s a tax savings of $6,660 assuming a 37% tax bracket.
If instead you buy a Tesla Model X for $120k (100% business use). It’s GVWR is greater than 6,000 lbs so the max write off in 2020 is $25,000 (S179 for SUVs) + $95,000 (S168 100% Bonus Depreciation)= $120,000 in Year 1. That’s a tax savings of $44,400 assuming a 37% tax bracket. The remaining basis of the vehicle is $0 because it’s been fully depreciated.
So bonus depreciation is a great way for businesses to recapture the costs associated with investing to grow the business through capital expenditures.
www.investopedia.com/terms/l/luxury-automobile-limitations.asp
bradyware.com/business-vehicle-deductions-2020/
Great video, thanks so much for sharing! I have a few questions.
1) If I plan to use the car for ride sharing (Uber and/or Lyft), does that count as "for business"?
2) For the at least 50% for business requirement, is that for the lifetime of ownership or does that phase out at some point? (say after X amount of years)
50% for the year of purchase. so if i buy a car in 2020, at least 50% of its use in 2020 must be for “business”. after u receive ur tax deduction for 2020, there is no minimum business usage because the whole point of section 179 is to help businesses deal with deappreciation.
Thx for rhe excellent explan! I have a Q. What happens in the 2scenarios below :1. Lease paym If you prepay the lease
2. You put a large downpf/the car w/mtly paymts. How much can you deduct in the year of purchase and placed in service
Great video: Have a couple of follow up questions:
#1 Does your net income have to be equal or more than the purchase price of the car? For example, if I make $50k net income from my business, can I use these depreciation techniques to fully deduct a $130k+ Mercedes G Wagon?
#2 Would I have to pay off the vehicle up front or can I finance?
Following
I like how simple & clear your explanation sounds. Thanks! I'm teaching (so, W2!) but I wanna do uber & Lyft again (side hustle, as they say) & I'm looking at optimizing the write-offs. What else should I be looking at? Thanks ahead...
Thank you, very good explanation. Better than my CPA attempts.
Great video, is there a book or source material that has the tax code accessible that you would recommend?
Great video 🙏🏾..
how long do you keep the car for to avoid tax recoup .. 7, 8 years?
I will watch all your videos
I see that you mentioned the tax savings for the IRS. Can you touch a little bit about how you would still be liable for state taxes in California on that income of 75,000 in your example of a vehicle purchase.
Great Video Nguyen. Thanks a lot for taking time out of your day to educate us.
I got a question for you, let’s say my business has 50k of income on a calendar year and I want to buy a car for 90k and use 40k of personal assets to pay cash for the vehicle.
How this scenario would play out? Would the book Value be 40k or I would still have the book value at 0$?
Great video! What if I bought the vehicle last year and didn’t use 179. With the example you used in your video. How much would I be able to write off? Also can I do this for leases and financed vehicles?
Thanks so much! Answered all my questions. Your videos are great.
Thank you for the feedback!
at the end, you said if we decided to sell the car in the later year, we would be hit with a large tax bill. how can that be when the car is depreciating every year there after?
700th like here. Grinding my way to the millionaire club
Can you elect section 179 year one of a vehicle purchased for business use and then in year 2 plus every year thereafter take the mileage deduction as an ordinary business expense?
This would be for a Turo type of business
What would happen if you take section 179 and bonus depreciation and say you wrecked that vehicle in year three. I'm assuming they would recapture some of those savings. Of course you would be purchasing another vehicle. Would the new vehicle under whatever the current 179 rules were cancel out the recapture owed
I think you are wrong on the 6k LBS rule. You can deduct regular passanger vehicle but it has to be used for business at min. 50% and you are caped at 11,500 if I remember correctly
So you basically get payed back for your car if over 6000. But if you sell it you have to pay it back?
You buy the car lets say Model X. Zero down. Do you get 25K towards the purchase or do you have to make a year of 1500 a mo payments then tax time get 25K and how do you "depreciate" the rest of the car who pays it? Does govt give you a check at year end to give to Tesla?
If you lease the car, are the lease payments deductible or is the value of the vehicle deductible?
That was a great explanation
Good job
Greg
What if you run a small residential care home for the elderly with a maximum of 6 residents and I want to buy a normal passenger vehicle over 6000 pounds? Would the $25,000 cap still apply since not all of the residents would need to leave at the same time, and it would also be used for things like getting groceries and supplies?
How do you reflect this in the 2020 P&L?
What exactly does it mean when the vehicle is written off? does it get paid for 100%? Or what happens?
If a vehicle is under 6k pounds, but you order it and have some parts replaced at the manufacturer like say, a plastic bumper with a steel bumper, front and back, then it passed the 6k pound mark, would that still qualify? They are regular options offered by the manufacturer but not sure how it works
What if you don’t sell the vehicle post 179/deprecation but trade it in for a newer vehicle in 3-5 years? Is this considered a sale?
Hi, Nquyen. Is it possible to add any depreciation to car that I bought and sold at the same year when I put it into the service? Which way is better to go? one way is to deduct all purchase price with license/taxes taxes plus depreciation or another one just calculatee the difference between purchase- selling price? Please, advice.
Just came across your vid it was very helpful...just had a question what if the vehicle is under the 6,000 lbs? Would the business owner be eligible for the 18k deduction?
I believe you can only deduct 50% of vehicle's price if its under 6,000 lbs.
EXCELLENT info
When you choose to depreciate it slowly. Do you follow market value or is it up to you?
does your business have to make a certain amount to be able to write off certain vehicles
How much money would the small businesses need to be making per year
Is there something like this business coaching or management training? Like if I were going to hire a coach for a year and we had a contract. Is there guidelines for taking a dedeuction this year in that case?
How does it change your write off amount for a vehicle 6k lbs+ if you take out an auto loan to finance it (not a lease)?
Which section allows you to write off the maintenance for the cars and gas
Hi Nguyen, can you deduct sections 179 agains ordinary income. If someone has a loss on schedule C. But, they purchase a truck under their business and already has a loss they cannot take it agains their W-2 taxable income correct?
What about the costs of building an office for a self employed business in the basement of a private home? Can I use the 179 deduction or the bonus depreciation it?
Wondering about removing from inventory and placing into service? Say you sell computers or cars and you had some in inventory from previous year/s , then place it into service in current year? Is that considered "purchased" ? Also, can I sell the business an asset(backhoe) to be used in business and be 179ed ? Thanks
Great information just started small business .
Question 🙋🏾♀️ so with a small business loan my question is what cars can I write off like Mercedes G wagon or jeep renegade that II’ll use it for business ??
Gross Vehicle Weight Rating is the maximum load the car can carry. the actual vehicle weight (curb weight) can be much less than 6000#. GVWR = curb weight + payload. Like you said, it's for commercial vehicles like trucks and vans and buses that may be light when empty, but can carry a lot of weight. i'm pretty sure the X5 doesn't weight 6000# empty, but GVWR for the X5 and many SUVs and pickups are over 6000#
i can not hear what you said about the depreciation when skipping the first year. also, can you explain about the disposing of the asset like vehicle. thank you
Thanks for the info. I really appreciate it. So it I were to buy an electric truck that costs 89k. I would get all that money back when I file my taxes? Sorry if it’s an ignorant question, I don’t know too much about tax code.
What if I want to buy a truck for my business every year?? Got several employees.. can I use the same method every year?
So what if I earn under $5,000 in my business this past year. And buy a 35,000 car that year. Do I get a $30,000 credit?
@@cisnerosmike thank you! That makes more sense
Thank you so much for the video! If the small business owner uses Section 179 to purchase a qualifying SUV and plans on keeping the SUV for 5-7 years. What happens when you sell the SUV after such time/ the SUV's useful life?
I'm only 19 so I am probably wrong. But I would assume you pay capital gains tax on whatever the sell price was. Not sure if long term capital gains tax applies to this as it does with stocks...
I’m getting mixed dates saying that the section 179 and bonus depreciation is ending in the end of 2021 or end of 2022. Can you explain which date it is?
Is it true that if you are trading in a car, you don't get hit with a tax for the car you are trading in?
Great video! I have one question however, I have a few bitcoins that im thinking of selling. Could I use my short term capital gains profit to buy an suv and write if off completely under Section 179? I have a small carpentry business at the moment.
What happens if I buy a car and do 179 plus bonus deduction and then in a year or 2 I sell my business, what happens?
So if I have a Toyota Corolla (weighs under 3k) can I still do the gradual depreciation deduction? (used over 50% for business)
Is it only greater than ? Or is is equal to and greater then? I’m talking about a Toyota Highlander hybrid which GVWR is 6000 pounds
Hi, thanks a lot for the video. If an individual who is sole proprietor sells a business asset in which he took both section 179 and bonus deduction would require to recapture the gain at ordinary rate (the individual'r tax rate) if that asset is sold at a gain in future?
8:28.. if the car is under 6,000 pounds, can't you deduct $18,500 and take bonus depreciation for the rest? Didn't the Job Act make this change? 100% for 2022 and 80% for 2023 etc?
I appreciate that rule, thanks a lot
I bought a Ford Transit 350 Cargo Van and I am getting conflicting information regarding the weight being “gross vehicle weight” and “gross vehicle weight rating”
Ford sent me a screenshot showing “gross vehicle weight” of 9500 but it also shows on my door sticker “gvwr” 9500 so I’m just confused how much the car actually weighs so I can write off the full cost rather than partial. Any thoughts ?
So how does the de uti on work and 100% that means the car it potentially paid off right? Do you get that money back?
Does this still apply for 2021? if you have a rv rental class c, does it qualify as business equipment? Thank you.
Good video do you think it would work for a food truck
Does bonus depreciation and section 179 have to be on the first year of a new business? Or the first year of a new purchase?
If that’s the case, can you use it every year?
Same year of purchase
You can use them both every year.
@@CosmicCosmo1 thanks
Say I buy a $50k qualifying vehicle and take the full 100% deduction in 2021. Then I sell it in 2022 for $40k so the $40k is added to my 2022 income. But then in 2022 I also buy another qualifying vehicle for $40k. Can I use the section 179 again to fully write off that $40k replacement vehicle I purchased and offset the $40k added income from selling the first one?
how does this code work if your company makes no money the first year?
What happens if (before factoring in the vehicle) you only owe $7,000 in taxes at the end of the year? Should you depreciate the entire amount of a $50,000 car or just $7,000 of it to make your tax liability for that year ZERO?
HUH, what do you mean by "normal" depreciation?? I purchase it at the end of 2018 Dec and put into use the next year. Does this mean I skip the 179 depreciation?
Do you have to put the car under your business LLC or buy under business owner you name
Nice choice in music
Can you provide a list of the vehicles that qualify for the 179 deduction? Where can I find an updated list?
Google
Could I do Bonus for half the value and then S/L for the remainder of the assets life as well?
How do I look up the depreciation on 179 from last years tax
I use a Honda fit for my IT business and I removed the backseat to place tools there. This vehicle only weighs 3k pounds however it is used for my business about 90% of the time. Can I buy a newer version of this car and write it off 100%?
Great video thank you!
You will likely be able to write off a maximum of 90% since you use it 90% for business.
hi is this for Australia?
Great video. Can you lease purchase a vehicle and still take the sec 179 deduction for the first year?
I'm a tax newbie with a question.
Say you have a small business that has $40,000 owed in IRS taxes.
If you finance a truck, say for $50,000, does that mean you can use section 179 to wipe your tax debt to $0?
No that's not how that works. Deductions don't directly offset tax liability. Deductions offset income, which is then used to calculate tax liability.
@@NguyenCPAs Thanks for the answer!
what's the name of the song at the end of the video? haha THanks for the info bro
Does the needs to be new?
The write off is not free money though right? Like it's just 75k you don't pay taxes on. It's not like I buy a 75k x5, then on my taxes write off 75k and they give me a 75k refund check.
Correct. It just reduces your income
Thanks for explaining in detail
Can you give an example for deduction for vehicles weighing less than 6000 lbs
Using minimum depreciation
I think cars and lite trucks are $11,610.00
Great video. I am a landlord which used to owned 6000lbs Landcruiser but I gifted to my son early this year. By taken section 179, can I have my son sell it back to me at market price $25000 thus I can write it off the taxable rental income? Please advise. Thank you much.
also please explain about section 169. thanks
I just don’t understand why is section 179 taken before bonus depreciation? Buy $50000 but have $20000 income = just take 100% depreciation to have -30000 income?
Doesn't the new TCGA mess with some of this?
What happens when you sell the BMW after the 7 years useful life?
One thing I think people should talk about: is this a good financial decision? Paying the money back on income when you sell is a new angle that I did not know about. Also a lot of times people are desperate for tax deductions, or they spend more money in search of tax deductions without realizing they are not saving the total amount in actual cash. Meaning if their tax rate is 45% on income, and they "write off" a 100k in income. They are only really saving 45k. So in a sense, they spent 65k to save 45k from the government.
But they gained something in the process so they gained a 65k item for 20k
Hi, are you located in LA area?
We are in Denver
Drop the background music. It's destracting.
Do you have to own one or two business?