I bought a new truck last year, put $27,000 as a down payment. I thought that with the new tax laws that I could deduct the entire $27k from my 2018 taxes. However my tax person is telling me that is not true.

He is depreciating it over 5 years, but says I can deduct about half of the initial down payment. What say the SF oracle?

I think you are right. I'm definitely not a CPA, but have one at a large firm that handles my business accounts every month. I got a new 2018 Yukon last year and paid cash for the difference on top of my trade. The entire amount was depreciated in one year.

quick google fu yields this (with detailed stipulations):

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100% first-year bonus depreciation is allowed for heavy SUVs, pickups, and vans used over 50% for business

The TCJA allows unlimited 100% first-year bonus depreciation for qualifying new and used assets that are acquired and placed in service between 9/28/17 and 12/31/22. However, a used asset cannot have been previously used by you or your business entity; it must be new to you or the entity. Under prior law, the first-year bonus depreciation rate for 2017 was only 50%, and bonus depreciation was not allowed for used assets.

The new law’s 100% first-year bonus depreciation deal can have a hugely beneficial impact on first-year depreciation deductions for new and used heavy vehicles used over 50% in your business. That’s because heavy SUVs, pickups, and vans are treated for tax purposes as transportation equipment rather than passenger vehicles, and that means they qualify for 100% first-year bonus depreciation.

However, you must use a heavy vehicle over 50% for business for 100% first-year bonus depreciation to be available. Otherwise, you must depreciate the business-use percentage of the vehicle’s cost over a six-year period.

https://www.marketwatch.com/st...s-for-you-2018-03-06

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Heavy SUV and truck is one rated at GVWR of 6K I believe. It's a reason to buy a mohunkin' truck instead of a Tacoma.....

I take a 100% deduction on all of my business equipment the year it was purchased. Financed or not, and any money paid towards the purchase is irrelevant.

If financed, the interest is deductible the following years, but no additional depreciation.

If your truck qualifies (and GVRW isn't the only qualification) you can take that hole damn thing if you want to.

If you say you drive 10k miles, and 8k for work, then you will only get 80% of the 100%, but I don't think that is your issue based on your telling of the facts.

Pickup needs at least a 6' bed for a full first year depreciation on a section 179 deduction.

Curious on the deductibility of new vehicles for Uber, Lyft drivers. Are these guys 1099 or considered their own business entity? I’m not a driver, but was curious, as a lot of these drivers seem to have very new rides.

quote:

Originally posted by tanner:
Curious on the deductibility of new vehicles for Uber, Lyft drivers. Are these guys 1099 or considered their own business entity? I’m not a driver, but was curious, as a lot of these drivers seem to have very new rides.

For most Uber drivers, it makes more sense to take the standard mileage deduction of 58 cents per mile.

Thanks for all the info. I will send some of this to my tax guy. It is 3/4 ton with 6.5'bed, so should qualify. Heavy Duty Ram diesel with 4x4. 8,000 lbs. gvw or empty, I forget.

If you have to do the work and research for your tax person who you pay to maximize your tax deductions legally, why is he still your tax person?

I'm just asking.

quote:

Originally posted by c1steve:
Thanks for all the info. I will send some of this to my tax guy. It is 3/4 ton with 6.5'bed, so should qualify. Heavy Duty Ram diesel with 4x4. 8,000 lbs. gvw or empty, I forget.

So long as it's > 50 percent business use, you are good to go on writing the whole thing off using the 100 percent bonus depreciation. And, the beauty is that bonus depreciation doesn't have the nasty recapture provisions that using 179 has. Nobody I'm doing is using 179 it's all 100 percent bonus. Assuming fact pattern doesn't include some kind of trade in issues with respect to how much tax basis you have in it. If this was a cash buy, new deal. The purchase price is the amount you can write off.

And, agree with Rey. If you are using the low bidder, ask him to file your extension and then make a change.

quote:

Originally posted by Rey HRH:
If you have to do the work and research for your tax person who you pay to maximize your tax deductions legally, why is he still your tax person?

I'm just asking.

Legit question.

If I take a 100% depreciation on a newly-acquired business vehicle, that means I can never deduct mileage (or operating expenses) on that vehicle?

I'm looking ahead in the optimistic belief I may want to reduce taxable income at some point. A Traditional IRA will lower AGI by a little bit but a new truck will put a wallop in it, for sure.

You deduct as depreciation in tax year of purchase 100% of purchase price including any accesories. Going forward you can only duduct fuel and maintenance,insurance and taxes.

Unless laws just changed this is the way its done. Your tax person may need to be your former tax person.

Some good info here

https://www.section179.org/section_179_deduction/

quote:

If I take a 100% depreciation on a newly-acquired business vehicle, that means I can never deduct mileage (or operating expenses) on that vehicl

Hangtime pretty much nailed it.

Don't confuse the depreciation with anything else. The 100% first year deduction only covers the depreciation. Operating expenses are a separate deduction.