Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Uncle Sam avoidance and large vehicles IRS 179...
Old 11-17-2014, 10:08 AM   #1
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: North
Posts: 714
Uncle Sam avoidance and large vehicles IRS 179...

So I realize this is not a tax forum, and perhaps there is a better place on the interwebs to post this question, if so I am open to suggestions.

I read on MW a while back regarding IRS 179 Vehicle Depreciation, quoting the article:

How a big SUV and a home office can cut your tax bill - MarketWatch

'the really big deduction is only available for an SUV, pickup or van with a manufacturer’s gross vehicle weight rating (GVWR) above 6,000 pounds that is purchased (not leased). First-year depreciation deductions for lighter vehicles are subject to skimpy limits of a little over $3,000—just a fraction of what a bigger vehicle can get. '

and if you then leverage a home office and the "over 50% business use test" again quoting the article...

'Sometimes the over-50%-business-use test is difficult to pass. But you’re much more likely to pass if you have an office in your home... The point is, when your home office qualifies as a principal place of business, you can easily rack up plenty of business miles just running around, which makes it that much easier to pass the over-50%-business-use test for your heavy vehicle. '

Then they have a nice warning,

'Warning: Your Section 179 deduction cannot exceed your aggregate net business taxable income (calculated before the Section 179 write-off). However, if you operate as a sole proprietorship, or as a single-member LLC treated as a sole proprietorship for tax purposes, you can count any wages that you earn as an employee as additional business income. If you’re married and file jointly, you can also count your spouse’s earnings from employment as well as any self-employment income. These loopholes reduce the odds that you’ll be hurt by the net business income limitation.'


So my question, is do I qualify for this deduction...

My DH offices out of home full-time and is W2 for a non-profit, she already submits for *partial mileage reiumb (along with cell and internet), and I office 50%+ W2 contractor to another office downtown 12mi away. We bought this 1/2ton pickup new with intentions of only driving for business purposes. (roughly 10k mi in 2014). Now I have an LLC, its active in a sense but I havent reported income or loss on the LLC, nor even reported it to the IRS in about 4years. Could I leverage this LLC I have filed with the IRS to leverage this "loophole".


How likely do you all feel the IRS is to bawk and cause an audit-avert situation if I claim this large vehicle tax? I feel like after running the calculator, I should be able to take a first year decuction of $26,400.

I found some more helpful info on this subject in case people are wondering:

Section 179 and Bonus Depreciation | Section179.Org
__________________

__________________
AA (Stock/Bond/Cash ): 99/0/1% MIX (Small/Mid/Large): 50/25/25% BLEND(US/Foreign): 100/0%, (Value/Growth/Blend): X/X/X% REIT (Real Estate Equity): 50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
kgtest is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-17-2014, 03:22 PM   #2
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 1,588
I am not a tax expert, but do take every single, no matter how small or chance for audit it may have, legal deduction I can. I have a small home-based side business, and do take the home office deduction and accompanying expenses deductions. Since I do not use a vehicle for solely business use, I just take mileage. Less trouble for me and also I don't have any recent purchased newer truck. I can also use any of my several vehicles. I just keep track of the miles and this is a lot less trouble for my situation.

As long as you meet the requirements, I see no reason not to take the maximum allowable deductions you are entitled to. You comply with the law, nothing IRS can do. Don't be afraid to take what you are legally entitled to, just be sure you have the receipts and records to back it up.
__________________

__________________
After Monday & Tuesday even the calendar says, W-T-F...

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/16 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is online now   Reply With Quote
Old 11-18-2014, 05:21 PM   #3
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: North
Posts: 714
I agree. I am phoning the IRS tomorrow to recover my EIN. If the IRS doesn't have it...its pretty easy to suffice I won't be leveraging this anyways.
__________________
AA (Stock/Bond/Cash ): 99/0/1% MIX (Small/Mid/Large): 50/25/25% BLEND(US/Foreign): 100/0%, (Value/Growth/Blend): X/X/X% REIT (Real Estate Equity): 50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
kgtest is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Help Uncle Sam find qualified lawyers. clifp Other topics 1 02-09-2010 08:03 AM
Uncle Sam to get deeper in the banking business? REWahoo FIRE and Money 1 10-08-2008 11:08 PM
Have you tried Uncle Sam's Retirement calculator? aida2003 FIRE and Money 3 06-19-2008 06:51 PM
Paying Uncle Sam: Any creative options? msbearkeley FIRE and Money 1 04-07-2008 03:44 PM
Anybody else loan Uncle Sam big $$$ laurence FIRE and Money 61 04-06-2008 08:56 AM

 

 
All times are GMT -6. The time now is 04:45 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.