179 Tax Deduction Question
Thread Starter
|
Junior User
Joined: Nov 2004
Posts: 66
Likes: 0
179 Tax Deduction Question
I am a self employed Carpenter and I puchased a new '04 F250 a little over a month ago.I payed cash for it but to get extra 1000.00 off I finianced 2500.00 through ford.
Do I have to pay that off before years end to qualify for 179 tax deduction??
Thanks,
Matt
Do I have to pay that off before years end to qualify for 179 tax deduction??
Thanks,
Matt
More Turbo
Joined: Aug 2004
Posts: 577
Likes: 15
From: Georgia
It doesn't matter whether you paid cash or financed the vehicle, it's the cost of the vehicle that can be used for the Sec 179 deduction. You can only write off your business portion of the vehicle which is the cost multiplied by the ratio of business miles driven to the total miles driven. If the ratio changes in later years, it's possible that some of the Sec 179 deduction may have to be recaptured or paid back. Your tax preparer should be aware of that.
Thread Starter
|
Junior User
Joined: Nov 2004
Posts: 66
Likes: 0
Originally Posted by kabcpapc
It doesn't matter whether you paid cash or financed the vehicle, it's the cost of the vehicle that can be used for the Sec 179 deduction. You can only write off your business portion of the vehicle which is the cost multiplied by the ratio of business miles driven to the total miles driven. If the ratio changes in later years, it's possible that some of the Sec 179 deduction may have to be recaptured or paid back. Your tax preparer should be aware of that.
Senior User
Joined: Sep 2003
Posts: 170
Likes: 0
From: Bartlett, TN
It would also depend on what other purchases you made during the year that you are election Sec. 179 on, so without the full picture it would be hard to say. There is also a bonus depreciation that could possibly come into play.
Posting Guru
Joined: Sep 2003
Posts: 1,174
Likes: 0
From: Near Wamego KS
If the pickup is 100% business use - it's 100% deductable as a 179 eligible peice of equipment. If its only 70% business - then you're only able to deduct 70% of the purchase price, if it falls below 50% business use you can't use section 179. You can not use section 179 to create a business loss either - it can only reduce income (individual, C Corp, S Corp & Trust) to $0.00. You can make a loss on your schedule C and off set it against other income (wife's W2) - but your taxable income on your 1040 can't go below -0- using section 179.
This is a good site to cover the basics:
http://taxguru.org/incometax/Rates/Sec179.htm
This is a good site to cover the basics:
http://taxguru.org/incometax/Rates/Sec179.htm
Last edited by dhermesc; Dec 21, 2004 at 11:50 AM.
Freshman User
Joined: Aug 2004
Posts: 34
Likes: 0
From: Canandaigua, NY
In taking this depreciable property as a 179 expense...remember to first work your Sch C through to see how much of the expense of this property you need to "0 out" your tax liability... you can take part of the cost as 179 and depreciate the balance over 5 years. ultimately an expense to reduce taxable income in the 5 future years. Keep track of all expenses relating to the truck as a buisness expense. You will not get a deduction for milage but will for individual expenses....
Trending Topics
Senior User
Joined: Sep 2003
Posts: 170
Likes: 0
From: Bartlett, TN
Originally Posted by vansoutriding
In taking this depreciable property as a 179 expense...remember to first work your Sch C through to see how much of the expense of this property you need to "0 out" your tax liability... you can take part of the cost as 179 and depreciate the balance over 5 years. ultimately an expense to reduce taxable income in the 5 future years. Keep track of all expenses relating to the truck as a buisness expense. You will not get a deduction for milage but will for individual expenses....
FTE Stories
Ford Trucks for Ford Truck Enthusiasts
Top 10 Most Expensive Ford Trucks Ever Sold on Bring a Trailer
Joe Kucinski
2027 Ford Super Duty Buyer's Guide (Every Model, Engine, & Package)
Brett Foote
Top 10 Ford Truck Tragedies
Joe Kucinski
AEV FXL Super Duty - the Super Duty Raptor Ford Doesn't Make
Brett Foote
Lobo Vs Lobo: Proof the F-150 Lobo Should Be Even Lower!
Michael S. Palmer
Ford's 2001 Explorer Sportsman Concept Looks For a New Home
Verdad Gallardo
10 Best Ford Truck Engines We Miss the Most!
Joe Kucinski
2026 Shelby F-150 Off-Road: Better Than a Raptor R?
Brett Foote
2027 Super Duty Carhartt Package First Look: 12 Things You NEED to Know!
Michael S. Palmer
Freshman User
Joined: Aug 2004
Posts: 34
Likes: 0
From: Canandaigua, NY
Thanks mshaeffer for completing the sentence full circle... expenses and not mileage used to work better for me but now mileage not expenses work better. Sold the 1991 f-250 and bought a 2005 f-350.
More Turbo
Joined: Aug 2004
Posts: 577
Likes: 15
From: Georgia
Originally Posted by mshaeffer
Actually, you can take a mileage deduction if you elect the standard mileage rate that is provided by the IRS. Also, depreciating the balance over the next 5 years will not provide a large deduction with the MACRS tables along with the luxury automobile exclusion rules. Just check with a good Accountant in your area. If your close to Memphis, let me know, and my firm will be happy to assist you.
More Turbo
Joined: Aug 2004
Posts: 577
Likes: 15
From: Georgia
The Sec 179 deduction applies to all earned income (W-2, 1099-MISC, Sch F, etc.) on the tax return. Interest and dividend income, IRA income, pension income, capital gains and Sch E income will not qualify.
Generally any income that social security tax and self-employment tax is paid on qualifies.
Generally any income that social security tax and self-employment tax is paid on qualifies.
Last edited by kabcpapc; Dec 22, 2004 at 06:39 PM.
Senior User
Joined: Sep 2003
Posts: 170
Likes: 0
From: Bartlett, TN
You must remember that sec. 179 is a depreciation deduction, therefore, you have to spend money to get the deduction. Also, it is not relevant unless there is some type of business income or loss. It goes on form 4562, which carries over to Sch. C, or its equivalent depending on corp./partnership/s.p.
Thread
Thread Starter
Forum
Replies
Last Post
SPL Tech
General NON-Automotive Conversation
15
Jan 30, 2007 09:42 AM
