179 tax write off

Discussion in 'Business Operations' started by gasracer, Dec 7, 2010.

  1. gasracer

    gasracer LawnSite Bronze Member
    Messages: 1,049

    My wife was checking on the tax updates yesterday and found that if you use the 179( full write off ) form you CAN NOT deduct mileage or any expenses for the item or truck again.
  2. mag360

    mag360 LawnSite Silver Member
    Messages: 2,445

    You can deduct actual operating expenses if you take the 179 deduction, but if you choose to take the mileage expense you cannot take the sec 179 or actual operating expenses.
  3. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,670

    Mag is correct. The miliage rate builds in depreciation. Additionally, the amount of 179 is limited to your taxable business income before deduction. If you decided to go th milage route, you have to use it the first year. Also, be sure your truck is not classified as "listed property". Some are.
  4. gasracer

    gasracer LawnSite Bronze Member
    Messages: 1,049

  5. deereequipment

    deereequipment LawnSite Senior Member
    Messages: 370

    What did you expect. to expense it out twice?
  6. DistinguishedLawn

    DistinguishedLawn LawnSite Member
    Messages: 8

    I'm not 100% sure on your question. I took a lot of upper-level Accounting courses when I was at Penn State, and I believe that you can either expense out your gas use, oil changes, maintenance, new tires, etc individually -OR- you get to use a mileage deduction format where you use a certain $-amount for the mileage that you've driven. The IRS basically figures out how much fuel, maintenance, etc it takes to operate the average vehicle and assign it a value. Assuming that you're driving a truck, you're probably better off to expense things individually on your own and not use the mileage figure. But I don't believe that any of the above discussion has any bearing on using the Section 179 write-off.

    Just to explain Section 179: The main incentive or reasoning for the 179 Deduction is to encourage people to invest in more equipment more often. A standard depreciation may be 5 or 7 years for a piece of equipment, so some of it is "written off" each of those years. By using the 179 deduction, you can deduct the entire value in the year that you put it into service (use). So two years later, you sell that equipment and buy a different piece and write off the entire value of that equipment (depreciate it fully in the 1st year). It encouraged you to keep the economy going by purchasing more equipment more often, because maybe you would have just purchased that one piece of equipment and used it for the full 5 years or something.

    Also, for vehicles to qualify, they used to have to have a GVWR of 6,000 pounds. Luckily for me, my 2002 Tundra has a GVWR of 6,030...hahaha.
  7. DistinguishedLawn

    DistinguishedLawn LawnSite Member
    Messages: 8

    GasRacer, I read your link to the IRS and I guess the mileage figure does now apply towards depreciation. So my recommendation would be to expense out your fuel and maintenance as expense items and still use the Section 179 deduction for the price of your vehicle.
  8. gasracer

    gasracer LawnSite Bronze Member
    Messages: 1,049

    Thanks guys. The reason I started this thread is because some was talking about doing it both ways and I wanted everyone to see what the IRS said about the deduction.

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