SSS Angus
Well-known member
What are the in's an out's for writing off a vehicle for farm use? I know equipment is written off over 5 years at 150% of it's value so how does it work for a truck?
Writing off a "Farm Truck?"
- Thread starter SSS Angus
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GMN
Well-known member
Thats what I got my good tax lady for! 
GMN
GMN
backhoeboogie
Well-known member
Incorporate, buy that truck yourself, then lease it to your farm business. Charge your farm $50 a month more than payments and it is all a complete expense write off for the farm from the get go. Fuel, tires, insurance, lease payments - everything.
Show the $50 a month profit on your taxes, and depreciate the truck.
Get yourself a good CPA. They'll save you a bundle in taxes.
Another option is to lease the truck from the dealership. It is pretty much the same racket except you lose some nickels with that method IMHO
Show the $50 a month profit on your taxes, and depreciate the truck.
Get yourself a good CPA. They'll save you a bundle in taxes.
Another option is to lease the truck from the dealership. It is pretty much the same racket except you lose some nickels with that method IMHO
jkwilson
Well-known member
Just doing mileage is way easier. If you do the maintenance work yourself, you come out ahead because the price for having it done is figured into the standard mileage.
jt
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get yourself a good tax person. the most you can write off is 100%.
imo, leasing is a bad deal too. check into it before you jump on it. in some cases the lease payments are subject to sales tax. also, the income/expense all goes ultimately to you, so why complicate things. the income on the example given will be more than 50 a month. the full rental amount is income. and you offset it with the interest/depreciation which can be more or less than the rental amount, but will ultimately be phased out as the vehicle ages. can get complicated.. get with your tax person.
also if you incorporate, technically the vehicle is not yours for personal use anymore. it belongs to the corp and if you use it for personal use, you could be required to pick up some extra income on your w2 for the value of that personal use.
for a small scale, mileage is by far the easiest and cleanest. just keep good records.
jmo
jt
imo, leasing is a bad deal too. check into it before you jump on it. in some cases the lease payments are subject to sales tax. also, the income/expense all goes ultimately to you, so why complicate things. the income on the example given will be more than 50 a month. the full rental amount is income. and you offset it with the interest/depreciation which can be more or less than the rental amount, but will ultimately be phased out as the vehicle ages. can get complicated.. get with your tax person.
also if you incorporate, technically the vehicle is not yours for personal use anymore. it belongs to the corp and if you use it for personal use, you could be required to pick up some extra income on your w2 for the value of that personal use.
for a small scale, mileage is by far the easiest and cleanest. just keep good records.
jmo
jt
There are 2 options to "expense" a vehicle, here are the basics...
1 - the mileage method, miles used for business purposes multiplied by the current amount allowed.
this does not include gas, depreciation, repairs, maintenance, insurance, interest, etc and you cannot take any of these expenses if you take the mileage method
2 - Actual method, business miles divided by the total miles driven for the year gives you a percentage. This same percentage is applied to all expenses incurred.... depreciation, insurance, repairs, interest, gas, maintenance, etc. This would genenerate the amount of your deduction.
As someone stated, if the vehicle is owned by the corporation, and it is used for personal use, there is a calculation to add income to your W-2 for that use. The corporation takes 100% of all expenses.
As always... consult with your CPA or tax advisor. The rules are complicated and everyone's situation is different. What applies to one, may not work for another.
Michele
1 - the mileage method, miles used for business purposes multiplied by the current amount allowed.
this does not include gas, depreciation, repairs, maintenance, insurance, interest, etc and you cannot take any of these expenses if you take the mileage method
2 - Actual method, business miles divided by the total miles driven for the year gives you a percentage. This same percentage is applied to all expenses incurred.... depreciation, insurance, repairs, interest, gas, maintenance, etc. This would genenerate the amount of your deduction.
As someone stated, if the vehicle is owned by the corporation, and it is used for personal use, there is a calculation to add income to your W-2 for that use. The corporation takes 100% of all expenses.
As always... consult with your CPA or tax advisor. The rules are complicated and everyone's situation is different. What applies to one, may not work for another.
Michele
