2021 Bronco GVWR over 6000 lbs = tax deduction for some trims / models

[EvlNvrDys]

Not gonna lie, I was trying to figure out what a mustang had to do with the conversation until I realized you said s179 and not sn195

had the same thought

One of you needs to explain. Because I refuse to Google s179 or sn195

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[vintage]

One of you needs to explain. Because I refuse to Google s179 or sn195

Section 179 of the tax code allows a business to deduct, for the current tax year, the full price of equipment that qualifies for the deduction. Vehicle over the 6000 GVWR qualify.

 

[EvlNvrDys]

Section 179 of the tax code allows a business to deduct, for the current tax year, the full price of equipment that qualifies for the deduction.

So it was a tax nerd thing huh?

Who wants to do my taxes? I've grown bored of them.

 

[j_marinelli]

One of you needs to explain. Because I refuse to Google s179 or sn195

LOL whats even more funny is there is a s197 mustang

so to recap:

S179 is a tax deduction on certain property as an expense when its used for "work". Sometimes viewed as a red flag to the IRS.

S197= Mustang 2005-2014

SN95 (totally flubbed that in my first comment)= Mustangs 1994-1998

 

[Blitzjb]

Then you would have to put commercial plates on it (I think) thus not being able to drive on the parkways (at least in New York)

Edit: is this a New York only problem or more specifically Long Island?

Commercial insurance is double

 

[Rick Astley]

Good CPA's aren't cheap and cheap CPA's aren't good.

And a real CPA can't give you tax avoidance advice..... Something important to remember. If your "CPA" is quick and fancy with the code enough they probably shouldn't be a CPA. But only in the eyes of the AICPA, their insurance carriers or their state chapter of CPA's. Their clients will love it, especially as it's the CPA who will be paying the penalties on your behalf for violating tax code. (you still pay the interest)

S179 has seen increased scrutiny over the past few years due to it quickly becoming a dumping ground for exemptions. Vehicles such as the H3 being booted from . I would be abundantly clear about your transactions and keep copious documentation. Remember, the IRS can only go back..... As far as it wants to. Sure it usually starts reviewing about 2-3 years back, but once it starts a fraud investigation, they will go back until documentation becomes fuzzy or the fraud started, then some quick calculations (you're guaranteed not to like) and you have your penalty amount. Interest will be calculated shortly thereafter based on how many years they want to penalize you for.

Failing to document your over-depreciated assets is something a 1st year IRS auditor should be able to find in short order.

And finally the crux of it all: The Bronco would still not fulfill the other S179 requirements for a business vehicle unless you had an off road adventure type business. I would be exceedingly wary of using S179 for your Bronco unless you could pass the use tests. (note, re-read the first paragraph about CPA's not being able to give tax avoidance advice and my statement here makes more sense)

EDIT: Basing S179 solely on vehicle weight will get you into trouble, an article is linked below, if you think it's a Rick Roll, then google "Hummer rule" (unless you have adult links in your browser history, it will outline why the Hummer and it's 6,000 vehicle weight is NOT farm equipment and not eligible for S179, good luck overturning that with Bronco)

https://www.section179.org/section_179_vehicle_deductions/

Full disclosure: I'm a federal compliance auditor by trade.

 

[MaverickMan]

So my wife is an self employed contractor and uses our current bronco for work, hauling lumber and tools. Is this something that applies to her, she does all that writting off tools and materials stuff on her taxes. I never grasped the concept since Ive never owed taxes, being a working stiff and all. If you write it off what exactly does it save you paying less in taxes? Is that full purchase price off or is it the mo thly payments off your annual taxes. All I know about write offs I learned from Seinfeld, they just write everything off man. My wife knows about enough to file her taxes and not get audits. So do I get a free Bronco or what?

 

[Karl_in_Chicago]

EDIT: Basing S179 solely on vehicle weight will get you into trouble, an article is linked below, if you think it's a Rick Roll, then google "Hummer rule" (unless you have adult links in your browser history, it will outline why the Hummer and it's 6,000 vehicle weight is NOT farm equipment and not eligible for S179, good luck overturning that with Bronco)

https://www.section179.org/section_179_vehicle_deductions/

Full disclosure: I'm a federal compliance auditor by trade.

Thanks, that gave me a good laugh.

 

[NCOBX]

And a real CPA can't give you tax avoidance advice..... Something important to remember. If your "CPA" is quick and fancy with the code enough they probably shouldn't be a CPA. But only in the eyes of the AICPA, their insurance carriers or their state chapter of CPA's. Their clients will love it, especially as it's the CPA who will be paying the penalties on your behalf for violating tax code. (you still pay the interest)

S179 has seen increased scrutiny over the past few years due to it quickly becoming a dumping ground for exemptions. Vehicles such as the H3 being booted from . I would be abundantly clear about your transactions and keep copious documentation. Remember, the IRS can only go back..... As far as it wants to. Sure it usually starts reviewing about 2-3 years back, but once it starts a fraud investigation, they will go back until documentation becomes fuzzy or the fraud started, then some quick calculations (you're guaranteed not to like) and you have your penalty amount. Interest will be calculated shortly thereafter based on how many years they want to penalize you for.

Failing to document your over-depreciated assets is something a 1st year IRS auditor should be able to find in short order.

And finally the crux of it all: The Bronco would still not fulfill the other S179 requirements for a business vehicle unless you had an off road adventure type business. I would be exceedingly wary of using S179 for your Bronco unless you could pass the use tests. (note, re-read the first paragraph about CPA's not being able to give tax avoidance advice and my statement here makes more sense)

EDIT: Basing S179 solely on vehicle weight will get you into trouble, an article is linked below, if you think it's a Rick Roll, then google "Hummer rule" (unless you have adult links in your browser history, it will outline why the Hummer and it's 6,000 vehicle weight is NOT farm equipment and not eligible for S179, good luck overturning that with Bronco)

https://www.section179.org/section_179_vehicle_deductions/

Full disclosure: I'm a federal compliance auditor by trade.

I’m pretty sure the hoopla with writing off the Hummers started with the H2(as the H1 had a much lower profile with such low production numbers) with its 8,600lb GVWR which put it into a totally different class of vehicles.
Regardless I do know of a business that exclusively bought H3s in Alaska, so I’m sure they found a way to write them off but they had ‘proof’ of business use as you mentioned.

 

[Karl_in_Chicago]

Then you would have to put commercial plates on it (I think) thus not being able to drive on the parkways (at least in New York)

Edit: is this a New York only problem or more specifically Long Island?

In Chicago you can't drive a commercial vehicle on the boulevards, which includes Lake Shore Drive. You also can't park on residential streets without an additional permit and there are 2 wards (out of 50) that don't allow it at all. If you put a cap on a pickup and get an "RV" plate from the state you're good or, the most popular hack, is to pop for the "FF" (Firefighter, you don't have to be one) plates and you're good. From the number of pickups you see with FF plates you'd assume everyone in CFD drives a truck (and a lot do) but it's just working the system. CPD used to be much more vigorous in enforcement on the boulevard driving - and a lot of drivers had no idea they were in violation - but now they have much better things to do and only go after somebody driving like a dick. Parking's still a bitch, though, because most of those tickets aren't done by patrolmen/women and it's a revenue source.

 

[NCOBX]

In Chicago you can't drive a commercial vehicle on the boulevards, which includes Lake Shore Drive. .

I have nothing to add to this conversation but all I can think of when I see a road named lake shore drive or hear the song played is LSD the drug.

 

[Adumb]

And a real CPA can't give you tax avoidance advice..... Something important to remember. If your "CPA" is quick and fancy with the code enough they probably shouldn't be a CPA. But only in the eyes of the AICPA, their insurance carriers or their state chapter of CPA's. Their clients will love it, especially as it's the CPA who will be paying the penalties on your behalf for violating tax code. (you still pay the interest)

S179 has seen increased scrutiny over the past few years due to it quickly becoming a dumping ground for exemptions. Vehicles such as the H3 being booted from . I would be abundantly clear about your transactions and keep copious documentation. Remember, the IRS can only go back..... As far as it wants to. Sure it usually starts reviewing about 2-3 years back, but once it starts a fraud investigation, they will go back until documentation becomes fuzzy or the fraud started, then some quick calculations (you're guaranteed not to like) and you have your penalty amount. Interest will be calculated shortly thereafter based on how many years they want to penalize you for.

Failing to document your over-depreciated assets is something a 1st year IRS auditor should be able to find in short order.

And finally the crux of it all: The Bronco would still not fulfill the other S179 requirements for a business vehicle unless you had an off road adventure type business. I would be exceedingly wary of using S179 for your Bronco unless you could pass the use tests. (note, re-read the first paragraph about CPA's not being able to give tax avoidance advice and my statement here makes more sense)

EDIT: Basing S179 solely on vehicle weight will get you into trouble, an article is linked below, if you think it's a Rick Roll, then google "Hummer rule" (unless you have adult links in your browser history, it will outline why the Hummer and it's 6,000 vehicle weight is NOT farm equipment and not eligible for S179, good luck overturning that with Bronco)

https://www.section179.org/section_179_vehicle_deductions/

Full disclosure: I'm a federal compliance auditor by trade.

There's nothing illegal or wrong with tax avoidance. It is tax evasion that you want to...avoid.

 

[Hkak45]

In Chicago you can't drive a commercial vehicle on the boulevards, which includes Lake Shore Drive. You also can't park on residential streets without an additional permit and there are 2 wards (out of 50) that don't allow it at all. If you put a cap on a pickup and get an "RV" plate from the state you're good or, the most popular hack, is to pop for the "FF" (Firefighter, you don't have to be one) plates and you're good. From the number of pickups you see with FF plates you'd assume everyone in CFD drives a truck (and a lot do) but it's just working the system. CPD used to be much more vigorous in enforcement on the boulevard driving - and a lot of drivers had no idea they were in violation - but now they have much better things to do and only go after somebody driving like a dick. Parking's still a bitch, though, because most of those tickets aren't done by patrolmen/women and it's a revenue source.

Luckily in Chicago you don’t have to worry about illegally driving on Boulevards because they are too busy with the 218 carjackings they had in January. If they do happen to give you trouble for it then tell them they should first worry about catching the people who stole 218 vehicles in January before they yell at you for illegally parking a commercial Bronco

 

[Rick Astley]

There's nothing illegal or wrong with tax avoidance. It is tax evasion that you want to...avoid.

The morally correct term a CPA would likely use is "tax limitation" or "mitigation". Our insurance carriers will remove any reference of "avoidance" in our engagement letters.
Yea, you can use the term, case law is catching up though.

 

[NotApplicable]

Financial literacy really should be added to US public school curriculum

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