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PDtax
PDtax, CPA firm owner
Category: Tax
Satisfied Customers: 1892
Experience:  32 years tax experience, including four years at a Big 4 firm.
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I work for my brother in his construction business. I am self

Resolved Question:

I work for my brother in his construction business. I am self employed is the way it is set up for tax purposes. I'm looking to buy a truck for work so that I can pick up materials, haul stuff etc and obviously get to work. I'm wondering if there is some sort of tax break for 2012 that I should know about before I buy a used truck. Does the truck have to be so big, or so heavy or does it have to meet a certain price, etc? I'm looking at either an extended cab or 4 door with a 6.5 foot bed. How do I know if any of those qualify and if they do what can I expect to write off in regards XXXXX XXXXX taxes for next year. THis would help me possibly buy something a little more expensive and less miles if I knew I could write off more. Thanks
Gary
Submitted: 2 years ago.
Category: Tax
Expert:  PDtax replied 2 years ago.

PDtax :

hi from just answer.

PDtax :

it sounds like you are asking about expensing a vehicle for tax purposes, or what is often called section 179.

PDtax :

There is also bonus depreciation, for new vehicles placed in service for 2012. Expensing can be used for a used vehicle.

PDtax :

Your business use will be inportant, too. Becuase business use will be high, you should qualify for either method.

PDtax :

If you go new, max depreciation for most trucks will be 11,000 or so for 2012. If you select a truck with a GVW of 6000 pounds or more, you will qualify for expensing.

PDtax :

So, buy what meets your needs in a new one, and still qualify for some tax benefits.

PDtax :

If it is a heavy truck (gross weight over 6,000) like F250 - you could use section 179 and take your business use of the purchase price as a deduction. Great in the first year, lousy after that (the depreciation will be used).

PDtax :

If this answers your question, please click Accept, and thanks from Just Answer. Ask if you need more info.

Customer:

Let me make sure. Im asking about the 2012 tax year not a new truck. I'm wondering if I get a truck what would make sense from your answer to go one way and deduct appreciation or just the miles. I prob drive around 12,000 miles a year and the truck would be ranging from 15-18000 in price. Are there some trucks that qualify? You said that I could get expense and also get tax benefits. I'm wondering what is my best scenario before I get a truck. Sorry. I'm a little slow in understanding tax stuff.

PDtax :

no problem, this is surprising complicated.

PDtax :

A used truck, you can claim miles (.55 per was the last 2011 rate). If you depreciate, you can claim gas, insurance, and write off some of the truck purchase price each year.

PDtax :

I would get the truck I wanted, not a big monster unless you just have to, and claim the 2-3,000 per year in depreciation plus fuel, insurance, etc. At 12,000 miles per year, 20 mpg and $4 gas, fuel would be another $2,400. Add $1,000 or so for insurance, and you can claim some $7,000 per year against your income.

PDtax :

The aggressive tax treatments, for new cars or the really big ones, are available but probably not what you want.

PDtax :

If this covers it, please click Accept, and thanks.

PDtax, CPA firm owner
Category: Tax
Satisfied Customers: 1892
Experience: 32 years tax experience, including four years at a Big 4 firm.
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