PsychoAndy
Lifer
Exactly. What we have here is a confused understanding of difference in tax law for the self employed/corporate world and personal.
-PAB
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SUV, truck owners get a big tax break
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Exactly. What we have here is a confused understanding of difference in tax law for the self employed/corporate world and personal.
-PAB
*sigh* Well, I know a lot of people do write-off some taxes with the luxury car break such as real estate agents or limo drivers.
However, including those luxury SUVs seperately from normal cars doesn't make sense. I can kinda understand a small business owner with needs for pickups but the rest is just plain stupid. They pass this and yet Congress is still BSing about extending unemployment benefits?
However, including those luxury SUVs seperately from normal cars doesn't make sense. I can kinda understand a small business owner with needs for pickups but the rest is just plain stupid. They pass this and yet Congress is still BSing about extending unemployment benefits?
You can use any car or truck for a business and depreciate the cost of the vehicle as a legitimate cost of doing business. All this rule does is give a huge benefit upfront with lower writeoffs later over the life of the truck. You can still buy a Honda Hybrid and writeoff the whole damn thing, you just have to use the standard 5 year depreciation.
Gawd how can people get through life and know so little about our tax code?
PlatinumGold
Lifer
Question answered.
PlatinumGold
Lifer
On the other hand, as someone pointed out earlier, the author should be shot for this statement. It is intentionally misleading verging on being an out and out falsehood. they make it seem as if a $30k write off and a $4k Tax credit are SIGNIFICANTLY different They are not depending upon the tax bracket your in.
$4k tax CREDIT means you get back $4k in taxes on your return, (if i paid 12k in income taxes i would get back $4k on my tax return).
a $30k Tax write off means i can reduce my TAXABLE income by $30k (If i have 80k taxable income, i can write off an additional 30k and pay taxes on the 50k.) obviously this can be a substantial amount of money, but it's not as gross a discrepency as the author would have you believe.
Where's CPA at?
This is talking about depreciation on a vehicle. Standard vehicles can be depreciated over 20 years time. The loophole is for vehicles over 6000 pounds. It's geared at businesses that have to buy commercial vehicles (big trucks, conversion vans, flat beds, ect). You get to depreciate those vehicles over a much shorter deprication life somewhere between 5 and 7 years...can't remember.
So...say you have two $40,000 vehicles. One that weighs 3,500 pounds (A lexus luxury car), and one that weighs 6500 pounds (Ford F350).
The ford would be able to deduct somewhere between $8,000 and $6,000 a year in depreciation while the Lexus would only be able to deduct $2,000 a year.
This is talking about depreciation on a vehicle. Standard vehicles can be depreciated over 20 years time. The loophole is for vehicles over 6000 pounds. It's geared at businesses that have to buy commercial vehicles (big trucks, conversion vans, flat beds, ect). You get to depreciate those vehicles over a much shorter deprication life somewhere between 5 and 7 years...can't remember.
So...say you have two $40,000 vehicles. One that weighs 3,500 pounds (A lexus luxury car), and one that weighs 6500 pounds (Ford F350).
The ford would be able to deduct somewhere between $8,000 and $6,000 a year in depreciation while the Lexus would only be able to deduct $2,000 a year.
PsychoAndy
Lifer
Theres just something about those Wolf Avatars that screams common sense. That and the sick guy. 😛
-PAB
WinkOsmosis
Banned
I'd like to know what business buys an X5 or a Cadillac Escalade for commercial use. This is bullsh1t. Yuppies get tax breaks just so they can pollute more and be a danger to others.
PsychoAndy
Lifer
Real Estate Agents.
Limo Companies.
Escort Services.
Strip Clubs.
Casinos.
-PAB
WinkOsmosis
Banned
Was your mother killed in the WTC attack? Your hatred for terrorists is unhealthy.
WinkOsmosis
Banned
What's so hard to understand? Just because you aren't personally affected by something doesn't mean you don't have a right to recognize that it's a problem.
About the X5 etc... those business buy cars also. So why aren't cars write offs for everyone?
BaliBabyDoc
Lifer
Health care consultant needs a Ford Valdez?!
I hate to agree with the anti-regulation/tax crowd but this is what happens when you social engineer the tax code and mandate emissions control. The domestic manufacturers engineer gross vehicle weights to exceed certain levels b/c emission and fuel economy standards are pegged to vehicle type and gross weight.
On the other side of town, the tax code was written to spur business investment and presumed that light trucks (which makes no sense anymore) exceeding certain weights would be used for commercial use only while passenger cars would weigh much less and would probably be used for significant nonbusiness purposes. Such impressively finite wisdom and imagination means I can call myself a healthcare consultant (which I am) and buy a X5 4.6si and deduct $24,000 from my taxable income in the purchase year. Yeah, I'm definitely going to use it for business purposes only.
Joe Schmoe the travelling salesman who has absolutely no choice but to buy something more fuel efficient has to buy a car and amortizes over a decade!
ML55AMG . . . makes it easier to get to work faster? 😀 Can't wait to trade in the X5 for an X7 . . .
I hate to agree with the anti-regulation/tax crowd but this is what happens when you social engineer the tax code and mandate emissions control. The domestic manufacturers engineer gross vehicle weights to exceed certain levels b/c emission and fuel economy standards are pegged to vehicle type and gross weight.
On the other side of town, the tax code was written to spur business investment and presumed that light trucks (which makes no sense anymore) exceeding certain weights would be used for commercial use only while passenger cars would weigh much less and would probably be used for significant nonbusiness purposes. Such impressively finite wisdom and imagination means I can call myself a healthcare consultant (which I am) and buy a X5 4.6si and deduct $24,000 from my taxable income in the purchase year. Yeah, I'm definitely going to use it for business purposes only.
Joe Schmoe the travelling salesman who has absolutely no choice but to buy something more fuel efficient has to buy a car and amortizes over a decade!
ML55AMG . . . makes it easier to get to work faster? 😀 Can't wait to trade in the X5 for an X7 . . .
PsychoAndy
Lifer
Because cars are not a legitimate expense incurred in the course of business. I have to check what chapter of the IRS code thats in. brb.
-PAB
EDIT: IRS TAX CODE.
Qualified business use
Except as provided in subparagraph (C), the term ''qualified business use'' means any use in a trade or business of the taxpayer.
If you can provide said "qualified business use'', you get your write off.
-PAB
BaliBabyDoc
Lifer
You are absolutely correct and absolutely wrong. For many people their car (and its upkeep) may be their primary expense. It is considered illegitimate b/c domestic automakers paid the legislators to write the laws.
While we can't argue with the law (just change them), it is disingenuous to contend this law is 1)justified by need, 2)justified by use, or 3)fair to people who purchase vehicles for business purposes based on utility not the tax code.
BaliBabyDoc
Lifer
As Minister Ashcroft would say, "you have no rights other than those bestowed on you by the Creater . . . oh yeah he left me in charge."
bleckywelcky
Senior member
Right, I'm sure a health care consultant absolutely needs a $47,000 Excursion to run his business.
In case anyone missed it:
Karl Wizinsky wasn't thinking about buying a new vehicle, and certainly not a big SUV. So why is there a brand-new $47,000 Ford Excursion sitting in his driveway?
He was able to write off $32,000 of the purchase price as a business expense.
"We really did it because it was a pretty hefty deduction," said Wizinsky, a health care consultant in Novi.
The guy's business apparently would have done fine without the Excursion and, from the looks of it, he didn't even want the damn Excursion in the first place. I'm sure some companies legitimately use this tax dodge (of which they get so many already), but I definitely call BS in this guy's case. He bought it because it was cheap enough to make him feel like a man, and possibly to pull a boat or camper around with (which is most likely also necessary to the operation of his business). Unless he pulls out a trick card that says he has 10 kids or something.
Edit: Ok, this sounds somewhat flaimbait-ish, but in all reality, everyone needs to recognize that tons of consumers buy trucks, suvs, etc, and do no more than go to the grocery store with them. If you pull something or haul something with it - fine! - if you have a big family and need a large capacity vehicle - fine! - but if you live alone, with a SO, or with a SO and a kid or two and just drive back and forth between work, then you don't need an Excursion, Expedition, F1/2/350, Navigator, Suburban, etc. Buy a damn econobox, save yourself the money, and help reduce pollution in and around the major metro areas that are already suffering from horrible air quality, acid rain, etc.
And tax breaks for companies are fine as long as they only help the business to stay in business. Once the larger companies (ie more than a single guy working on his own to support his family) are standing on their own, most of the tax breaks need to be removed and given to the general people.
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glenn1
Lifer
Why do you "hate to agree" with us? This is just a single (albeit somewhat extreme case) example of what we're talking about. This is why the argument is made that it's not only more efficient to simply cut tax rates across the board rather than trying to "target" tax cuts for particular lawmaker fetishes, but our simpler approach leads to less unintended and often negative consequences as well.
BaliBabyDoc
Lifer
My issue is the anti-regulation crowd often says industry will do the right thing as long as you don't mandate it. Umm, yeah. We have plenty of good corporate citizens . . . unfortunately, the rules have to be made to keep the dirty bastards in the lot in check.
WinkOsmosis
Banned
Exactly. The government should not pay people to pollute more, and all the things we know SUVs are notorious for, just because light trucks might be used for business.
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