How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Guru_Guy Your Own Question

Guru_Guy
Guru_Guy, Lawyer (JD)
Category: Tax
Satisfied Customers: 2418
Experience:  I am a lawyer who understands tax law and finance.
1987257
Type Your Tax Question Here...
Guru_Guy is online now
A new question is answered every 9 seconds

I work as a sole proprietor. I expect my 2008 income to be ...

Resolved Question:

I work as a sole proprietor. I expect my 2008 income to be approx 70K. If I purchase a pickup truck in 2008 (curb weight 7000 pounds, $50,000) and use it exclusively for commuting to work, can i deduct the entire purchase price against my 2008 income?
Submitted: 6 years ago.
Category: Tax
Expert:  Guru_Guy replied 6 years ago.
Hello,

Commuting costs are not a deductible expense. You could only deduct expenses related to travel between offices, to temporary locations, or while running errands for the business. Commuting costs are considered to be a personal expense.

Many sole proprietors get around this problem by having a home office which they consider their primary office, then travel between offices so that the travel can be considered a business expense. But there are special rules associated with that as well (See IRS publication 587):

http://www.irs.gov/pub/irs-pdf/p587.pdf

Even assuming the car is used 100% for business purposes, you cannot write off the entire cost in one year. A car is considered an asset. You would only be permitted to deduct a few thousand dollars each year for depreciation. Many business owners find it easier to take the mileage deduction, set at $0.505 per mile for 2008. For example, if you put 12,000 miles on for business travel, you could deduct $6060 in expenses, far more than you could take for depreciation.

For more details on writing off travel expenses, take a look at IRS Publication 463:

http://www.irs.gov/pub/irs-pdf/p463.pdf

But just to be perfectly clear, there is no way you can lawfully deduct the entire purchase price of the truck in one year.

Sorry if this is not the answer you wanted, but I hope this helps you understand the situation.

___________________

IRS CIRCULAR 230 NOTICE: Absent an engagement for written tax advice prepared in compliance with the regulations promulgated by the U.S. Department of Treasury, no person prepared the written information contained in or accompanying this communication for use or reliance, and no taxpayer can, therefore, use or rely upon the written information contained in or accompanying this communication, (i) to avoid any penalties that the IRS may impose, or (ii) for the purpose of promoting, marketing, or recommending to another party any tax-related matters.
Customer: replied 6 years ago.
answer not consistent with what i have read. why would my situation not qualify for a section 179 deduction?
Expert:  Guru_Guy replied 6 years ago.
As you described in your original question, you intended to use the vehicle to commute from home to work. That does not qualify as a business expense, thus making the vehicle ineligible for the 179 deduction.

If the vehicle primarily for business purposes, you may opt for the 179 deduction, but it would be limited to a maximum of $25,000. A 2004 change created this limit unless the GVW is over 14,000 pounds, or one of the following applies:

-- Designed to seat more than nine passengers behind the driver's seat,

-- Equipped with a cargo area (either open or enclosed by a cap) of at least six feet in interior length that is not readily accessible from the passenger compartment, or

-- That has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.

The remainder of the cost would have to be depreciated over five years. So by opting for this, you may be able to deduct a substantial portion of the cost in the first year, but not all of it.

However, this comes with some very important caveats.

First, Congress is considering reducing or eliminating the 179 deduction for SUV's. They could do this for the 2008 tax year, meaning after you buy the car, that deduction you counted on has disappeared.

Second, even under current law, if you end up using the vehicle in later years for less than 50% business use or if you sell the car before the end of the five year depreciation period, you may find yourself having to recapture the write off in that year, meaning if business goes bad, you are making less money and working less, you will find yourself also tied to a hefty tax bill to repay part of that initial write off.

But with these caveats, the 179 deduction might work for your situation if you are not primarily using it for commuting. I don't want to breeze over the main point of my initial answer. Commuting costs are not a business expense and a car or truck used exclusively for commuting is not eligible for a business expense of any sort.
Customer: replied 6 years ago.
I have read through your answers carefully and am more confused than ever. I don't think your answers are consistent.

you say i cannot deduct commuting costs, period. then you also say, "If the vehicle (sic) primarily for business purposes, you may opt for the 179 deduction,..."

so which is it? does "business purposes" mean other use than getting to work?
Expert:  Guru_Guy replied 6 years ago.
Business purposes means traveling between offices, or doing deliveries, or other job related work. Commuting from home to the office is very clearly and explicitly defined as a non-business purpose. If your business does not require a vehicle and you use it only for commuting, it does not qualify as a business purpose.
Guru_Guy, Lawyer (JD)
Category: Tax
Satisfied Customers: 2418
Experience: I am a lawyer who understands tax law and finance.
Guru_Guy and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.