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Writing off the purchase of a new pickup

Discussion in 'Business Operations' started by DA Quality Lawn & YS, Nov 15, 2010.

  1. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Posts: 8,896


    I bought a truck this season for use in my biz.
    For tax purposes, can you write off the purchase price of the truck on business taxes similar to how you would write off the purchase of a mower, etc?

    Do you have the option of taking a Sec 129 write off or 5/7/etc year write off like you would with lawn equipment?
  2. Roger

    Roger LawnSite Fanatic
    Posts: 5,921

    You need to work with a CPA familiar with small businesses and tax laws, to determine what strategy works best for you. No pat answer for your question. Each situation is different, meaning you need to find what works to your advantage. Some of the rules have changed in the past couple of years.
  3. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Posts: 8,896

    Update to this, since I have done extensive research on how to write a pickup off of business taxes (I am in the process of running my taxes now). What a pita, much more complex than writing off things like mowers, trimmers, etc.

    There are multiple ways to approach the purch of a 'new (to you)' truck for your biz

    1) Take the standard mileage deduction each year of use. If you do this, you cannot take a Section 179 write off nor claim any actual expenses for the vehicle. So, if you are considering this, you will want to be driving enough biz miles each season to outpace the deduction you would otherwise get by taking the Section 179/or depr. schedule and actual vehicle expenses.

    2) Take the Section 179 deduction (all up front). Good to do this if you need to write down income in the current year - but you will want to make sure you keep the vehicle in biz use for the depr life of the vehicle. Another option is to take the depr on a schedule for the life of the vehicle. A lesser write down but gives you some leverage in future years. Either way, can also tally actual vehicle expenses to take as well.

    The kicker is that the vehicle must be over 50% biz use at all times to qualify for the Section 179. And, any use less than 100% biz will reduce the amount of Section 179 write off you can claim in the year the vehicle was purchased. For small solo ops like me, this is a little bit of a rip because you buy the vehicle to use for business, but do use it for a little personal use as well.

    I cannot believe how complex this tax issue is. Completely ridiculous.
  4. stevenf

    stevenf LawnSite Bronze Member
    Posts: 1,612

    I have a cpa file everything but I prepare everything myself. I think the going rate is .55cents a mile or you can write off all business truck expenses seperately(whichever one is more).
    I believe you can only writeoff 80% for business if you only have one vehicle. Would almost be worth it to buy an old junker as a personal use vehicle.
  5. gasracer

    gasracer LawnSite Bronze Member
    Posts: 1,049

    I think it is .51 cents a mile. A few years ago when gas went to over $4.00 they let you go to .55 but reduced it when it went back down.You can use it for Personal and business as long as you keep them separate.
  6. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    its .50 now.

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