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Zip Taxes
Zip Taxes, Tax Preparer
Category: Tax
Satisfied Customers: 156
Experience:  CTEC Licensed / Mgmt Experience with H & R Block... Self Employed since 1986 Experienced in all Scheds
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I am converting a small pickup truck to a plug-in electric

Resolved Question:

I am converting a small pickup truck to a plug-in electric for a business. The business will be in operation this year about September when the truck is finished. The total cost of parts including the truck I purchased for conversion will be about $12,000.00. I am supplying all of the labor myself. What type of tax benefits will I receive this year (next year's return)? And how much can I use to offset income or establish a loss? Is there some type of bonus depreciation the first year?
Submitted: 3 years ago.
Category: Tax
Expert:  Zip Taxes replied 3 years ago.

Zip Taxes :

Welcome to Just Answers, I will do my best to Answer your Question.

Zip Taxes :

Very interesting....great job!

Zip Taxes :

Well as an expense, on your schedule C, it would be an expense under "other expenses."

Zip Taxes :

You can also depreciate it over 5 years.

Zip Taxes :

I will not follow under any Federal Credit under the Credit Act for Electric Cars or Hybrids due to the fact that those manufactures had applied for this credit to be given out..

Zip Taxes :

But as a sole owner of a company... you can expense it out due to the fact it's not an "actual cost" of maint. of a vehicle in which you can still take your mileage too.

Zip Taxes :

When satisfied, please hit the green accept button and again, congratulations.

Customer:

Thanks for your response. On "other expenses" of schedule C I would include the cost of all the parts and the cost of the vehicle ($2,000.00), right? Do I need to file a form 4562 also? Since I am deducting the cost of the truck already the first year how can I depreciate it over 5 years or is that just an option in lieu of expensing it all the first year? If I understand you correctly I would put my total costs on line 9 of sch. C (car and truck expenses) And also fill out section 4 and 5 ("Information on your vehicle" and "Other expenses".

Zip Taxes :

yes that would be correct. The cost of the vehicle would go into the 4562 and the miles, if any... but the equipment you installed would go onto the "other expenses" to be expensed out.

Zip Taxes :

You have the choice to expense out for the 5 years for the equipment, but you would know better as to your financial situation as to if you would benefit a total deduction under 179 or to depreciate it out.

Zip Taxes :

If it were me, even though it's electric, I would still calculate the miles out at the end of this year when using for business.

Customer:

I am thinking about buying Turbotax software but how much would you charge to do my taxes next year? I only have income from a part time job and probably a loss from my start up electrical contracting business. Do you live in California? Can you give me a ballpark estimate?

Zip Taxes :

I would love to do your taxes but per the policies of Just Answer's I am unable to solicit my services to you, but you can go to www.ZipTaxes.com :) if you know what I mean... but usually the fee is around 150.00

Customer:

Thanks a lot.

Zip Taxes, Tax Preparer
Category: Tax
Satisfied Customers: 156
Experience: CTEC Licensed / Mgmt Experience with H & R Block... Self Employed since 1986 Experienced in all Scheds
Zip Taxes and other Tax Specialists are ready to help you

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