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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I am looking to buy a new car and am wondering if I can write

Resolved Question:

I am looking to buy a new car and am wondering if I can write off any of the initial cost. I am self-employed and will me making around $200k this year. If I were to buy a $30,000 car, would I be able to write off any of that initial cost? Or only able to write off business miles, fuel, etc?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome to Just Answer!

Customer:

hello

LEV :

You may deduct sales tax paid for that purchase - use schedule A - www.irs.gov/pub/irs-pdf/f1040sa.pdf
On the line 5 - you should choose "General sales taxes."

If you will be using the car for business -you have an option to deduct:


your actual travel expenses - that include all receipts, insurance, depreciation etc, or


use mileage rate.


You may select either method that provides you with better deductions.


Most people use mileage rate deduction because of simplicity.


Please see more details in the IRS publication - 463 - http://www.irs.gov/pub/irs-pdf/p463.pdf


If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then in later years, you can choose to use either the standard mileage rate or actual expenses. If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period.

Customer:

Okay. So the initial cost I can't write off any of it right?

LEV :

Generally - you need to depreciate your cost - you may do that if you choose the actual method, but you will not be able to deduct the full cost in the first year.

Customer:

okay

Customer:

thanks for your help!

LEV :

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Let me know if you need any details.

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