For the last two years I've been self employed and drive a good deal to and from client work sites. I would like to get either a USED Cayenne Turbo or a BMW X5M as my work truck and to offset taxes. I would use this vehicle for upwards of 90% business use. I've read that first year I can deduct upwards of $25k the first year but not sure about each year after that. Also, I've heard that expenses like gas and maintenance/repairs can be deducted as well. Is all this true and does anyone have any helpful hints?

 

The "truck" has to be new and not just "new to you".

Section 179 (aka SUV tax loophole) expired as of 12/31/2013, or rather the limits have been restored to it's original limit of $25k. If you had purchased the truck last year, it would be have been considerably higher. The example my CPA gave me was that on a $97k truck:

• Section 179: $25,000
• Bonus Depreciation (50% of remaining balance...$95k-$25k x 50%): $35,000
• Regular Depreciation (20% of remaining balance...$95-$25k-$35k x 20%): 7,000
• Total First-Year Write-Off: $67,000
• The remaining $28,000 would be recovered in years 2 through 5 by means of regular depreciation.

There is debate on whether the federal government will extend this tax break or not. If they do, it probably won't happen until the second half of this year and will be retroactive.

Here are links for additional info:

Section179.org

2014 Tax Planning – Purchasing New Capital Assets, yeah I know it's Fox News!

Yes since it is a "business" vehicle, all costs associate with it is considered a business expense (gas, insurance, registration, maintenance).

 

Are you sure about it having to be new? This is what I found on Section179.org:The second link you provided from foxbusiness.com ...So by the looks of it... I can buy the $60k used SUV and at the very minimum write off $25,000 (less personal usage) for 2014.

Yes no?

 

I think the $25k is applicable to new and used. It was the bonus depreciation that only applied to new. I'm by no means a CPA or even close to a tax whiz. Highly suggest you consult with your CPA.

 

Thanks! I have actually talked with the CPA... I was just more or less looking for confirmation.

 

my account agrees with everything above

 

Yep. Purchase of a new or used would qualify under previous years' rules. A guess is they will renew this again, but who knows?