Drive it into a lake.
Question: I'm 1099 independent contractor. I think my CPA isn't on top of shit. What's the best way to write off a vehicle? Purchase? Deduct by mileage? Expenses? Depreciation? Or lease the vehicle? Assume this is a new vehicle, over 6,000 lbs gross weight. Will be 50/50 business/personal.
Last edited by aychamo_aycono; 07-02-2015 at 06:09 PM.
Donate it to your own non profit based in Hong Kong then lease it back to a your own shell company in the caiman islands then insure it under a BOP policy in Florida and drive it into a lake.
Business Mileage Deductions FAQs
Make sure you keep a log. If your CPA can't give you some deductions to lower your liability then find a new one.
Last edited by Kedwyn; 07-02-2015 at 06:34 PM.
I use a milage ace for my milage. GPS logs, basically a tattler for yourself. Makes milage super easy once you train it places you normally go that are and aren't business related, then you fill in the gaps outside of that.
The Mileage Ace - GPS Mileage Tracker For Business
Mileage is by far the easiest to deal with. You don't need a log unless you get an audit, otherwise nobody cares.
Generally, Mileage is the easiest way and the IRS usually allows a pretty fair mileage rate (I think it's around 50-55 cents per mile in recent years)
However, if you purchase a new car you will probably want to do itemized deductions for 5 years as you can write off the depreciation of the new car.
It's a sliding scale where the biggest writeoff is the first full year that you own the car, and then it declines each year for 5 years until the car has been fully depreciated.(the tables with the %s are in the tax instruction booklet)
I'm in the middle of doing this right now. I purchased a new vehicle in June of 2013. So for 2014 my deduction wasn't huge, as I only owned the vehicle half the year of 2013. This past tax filing was where I had the BIG deduction, as I owned the vehicle for the entirety of 2014. I think I was able to write off something like 38% of the full vehicle sales price (adjusted then for the % of business usage, which mine was about 55% business use, 45% personal use), so the actual deduction was purchase price x .38 x .55 for the year, so it was a nearly $6000 deduction(plus doing itemized deductions you can add in all other expenses such as gas, oil changes, etc) so this year I definitely benefitted from going itemized + depreciation over just a flat mileage-based deduction.
Last edited by joeboo; 07-07-2015 at 04:16 PM.
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