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

[North7]

All you need is a business license or incorporate, which isn't too pricey.

My 2dr BadSquatch won't hit 6000, but then again once loaded and if I add a Goose system, just maybe.....

Psst... LLC

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[Lakelife36]

If any of the 2dr models went over 6,000, I would upgrade to that model. I don't want a 4dr...wish I did. Lol

You fit in a 2-door?

 

[cyberbro]

Not sure if this was mentioned, but it looks like the Bronco models with a GVWR over 6000 can be fully deducted for business owners. This makes my two FE purchases even sweeter.

This deduction still exists? I thought that was from the Bush era and long gone. I used that deduction on a VW Touareg many many years ago.

 

[vintage]

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.

Looks like you'll want to take advantage of all the tax deductions Uncle Sam has to offer. Good thing your a federal compliance auditor by trade.

 

[Adumb]

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.

Full disclosure: I stayed at a Holiday Inn Express last night.

 

[FellowM3]

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?

Would love the answer on this as I am also curious

 

[North7]

Would love the answer on this as I am also curious

Qualified Tax Advice from my tax advisors, Mr. Google and Mr. TurboTax.

Heavy Vehicles

Heavy SUVs, pickups, and vans are treated for tax purposes as transportation equipment. So, they qualify for 100% first-year bonus depreciation and Sec. 179 expensing if used more than 50% for business. This can provide a huge tax break for buying new and used heavy vehicles.

However, if a heavy vehicle is used 50% or less for business purposes, you must depreciate the business-use percentage of the vehicle’s cost over a six-year period.

To illustrate the potential savings from these first-year tax breaks, suppose you buy a new $65,000 heavy SUV and use it 100% for your business in 2020. You can deduct the entire $65,000 in 2020 thanks to the 100% first-year bonus depreciation privilege. If you use the vehicle only 60% for business, your first-year deduction would be $39,000 (60% x $65,000).

To qualify as a “heavy” vehicle, an SUV, pickup or van must have a manufacturer’s gross vehicle weight rating (GVWR) above 6,000 pounds. You can verify the GVWR of a vehicle by looking at the manufacturer’s label, which is usually found on the inside edge of the driver’s side door where the door hinges meet the frame. Examples of suitably heavy vehicles include the Audi Q7, Buick Enclave, Chevy Tahoe, Ford Explorer, Jeep Grand Cherokee, Toyota Sequoia, and many full-size pickups.

https://bradyware.com/business-vehicle-deductions-2020/

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

 

[amccue90]

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

I'm just a little upset someone finally brought work to the forums for me.

 

[Lakelife36]

I'm just a little upset someone finally brought work to the forums for me.

There was a graphic designer around these parts a while back too

 

[Adumb]

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.

Leave it to the lawyers (and regulators?) to add ambiguity to the mix I guess. The difference between "avoid" and "evade" is very clear. Another case of political correctness only adding to further disagreement rather than keeping us from it.

 

[Lakelife36]

Leave it to the lawyers (and regulators?) to add ambiguity to the mix I guess. The difference between "avoid" and "evade" is very clear. Another case of political correctness only adding to further disagreement rather than keeping us from it.

That's not at all what this is

 

[Adumb]

That's not at all what this is

Sure it is. Somebody wants us to use different words so they feel better. Makes complete sense in many cases for the respect of mankind. I'm all for that. This is just regulators changing something that already makes sense for the sake of justifying their own existence. And the result is now that the issue at hand is less clear.

It's what they do.

 

[lrtexasman]

Would love the answer on this as I am also curious

I do my own taxes (even though my son is a CPA, lol) and I looked at the 179 exemption and saw trouble if trying to use the vehicle as a dual use (business/personal) vehicle. Namely the vehicle has to be titled to the company name and used at least 50% of the time for that business. The deduction is maxed out at 25k and the amount of miles driven for personal use prorates the exemption. So basically, unless you own your own company, title the vehicle in the name of that company, and drive at least 75% business miles (which will be deducted and recorded on company write off) it's not even worth messing with. And if you decide to trade the vehicle in there will be additional tax liabilities.

 

[doink]

www.section179.org for all of your 179 and bonus needs.

be careful and don’t follow the “jUsT iNcOrPoRaTE aND wRiTe OFF yOuR BroNCO”crowd as each situation is unique. I’d recommend consulting your cpa/tax professional. If you dont have one I’d imagine you’re not in a position to depreciate vehicles for business purposes. Just a broad assumption though.

signed, a cpa

 

[Lakelife36]

Sure it is. Somebody wants us to use different words so they feel better. Makes complete sense in many cases for the respect of mankind. I'm all for that. This is just regulators changing something that already makes sense for the sake of justifying their own existence. And the result is now that the issue at hand is less clear.

It's what they do.

Being careful with your words to not accidentally hurt someone is not the same thing as being careful with your words to not accidentally imply that you are doing something illegal.

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