Tax rules for purchasing an SUV or truck as a business expense

As you may have read from my Equity Rules post, I am looking to buy the latest Range Rover Sport HSE to replace Moose, a 15 year old Land Rover Discovery II. The 2017 Range Rover Sport has an MSRP of around $73,500, which is an exorbitant price for a car. SUVs are the curse of eco-friendly San Francisco. But I’ve long believed that if you don’t completely destroy your car before buying a new one, you’re still adding pollution to the world. I like SUVs because they ride high so I can see the traffic. They can ride through blizzards with ease, which is a must when I go to Lake Tahoe in the winter. Also, in the event of an accident, I prefer to ride in larger vehicles than smaller ones. Thankfully, SUVs have become more fuel efficient. The new Range Rover Sport V6 engine produces 345bhp in 17 city/23 highway. Just 10 years ago, such an SUV would have been a V8 engine running about 12 city/17 highway mpg from just 185 horsepower. But this is not a post defending the purchase of a large vehicle. The purpose of this publication is to analyze the aspects of buying a vehicle for your business to deduct expenses!

Start a business; take advantage of the tax law

So you have it man. The reason Land Rover has a large number of “off the shelf” tax depreciation books is because many companies buy £6,000 vehicles under their business entities and write off expenses over time, as the tax law allows. Notably, the IRS reviews small businesses based on audit fees and tax rates. If your business only earns $30,000 a year, buying a $75,000 SUV and writing it off within four years can raise red flags. However, if your business has gross revenue of $500,000 per year, a write-down of $10,000 to $45,000 per year may not seem overwhelming. The IRS is looking for small businesses created just to move living expenses into entities to reduce income tax.

As always, consult your accountant before changing taxes. I prefer SUVs for cars, so it makes sense to buy a brand new car from the company when the time comes. After thinking about cutting tax, I will get about 30% of the purchase price. You can easily start a business by registering your website with Blue Host as a trial version, then head to Legal Zoom to start an S-Corp or LLC Anyone can start a consultancy/freelance business as a sole proprietor. A website just helps legitimize your business. Also, given that the internet has 3 billion users and is still growing, everyone should have their own brand online. You can earn more consulting business, find new jobs more easily, and probably make a very good income online like me, if you do.

Tesla Model X Section 179 Vehicles over 6,000 pounds Gross Weight (GW)

Here’s a list of 2018 Section 179 for Tesla Model X with a combined weight over 6,000 pounds. Typically, the weight of each vehicle is placed on the side doors. 

  • Audi Q7 3.0L TDI
  • Buick ENCLAVE
  • Cadillac ESCALADE AWD
  • Chevrolet Truck AVALANCHE 4WD
  • Chevrolet Truck SILVERADO
  • Chevrolet Truck SUBURBAN
  • Chevrolet Truck TAHOE 4WD
  • Chevrolet Truck TRAVERSE 4WD
  • Dodge Truck DURANGO 4WD
  • Ford Truck EXPEDITION 4WD
  • Ford Truck EXPLORER 4WD
  • Ford Truck F- 150 4WD
  • Ford Truck FLEX AWD
  • Infiniti QX56 4WD
  • Land Rover RANGE ROVER 4WD
  • Land Rover RANGE ROVER SPT
  • Land Rover LR4
  • Lexus GX460
  • Lexus LX570
  • Lincoln MKT AWD
  • Mercedes Benz G550
  • Mercedes Benz GL500
  • Nissan ARMADA 4WD
  • Nissan NV 1500 S V6
  • Nissan NVP 3500 S V6
  • Nissan TITAN 2WD S
  • Porsche CAYENNE
  • Toyota 4RUNNER 4WD
  • Toyota land cruiser
  • Toyota SEQUOIA 4WD LTD
  • Toyota TUNDRA 4WD
  • Volkswagen TOUAREG HYBRID

Of course, there are always new vehicles with new modifications. Check again with your car dealer to make sure you’re buying a vehicle over 6,000 lbs.!

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