how should i buy my truck?

[The Car Stereo Company]

i need help guys and girls. do i buy my truck personally, or does my business buy the truck? pros and cons of each? i think if my business buys the truck, i need a higher insurance policy? due to being connected to my business its considered a liability? any tax breaks? how should i buy the truck?

thanks all

 

[ManleyORV]

Best to be discussed with your accountant. But I bought and financed mine through my company, we are going to claim the deduction under Section 179 so I can take 100% of the depreciation up front in a single year. Huge tax breaks as long as you have the revenue to offset.

Feel free to PM me for how it affects my taxes and my company financially.

Insurance is on my company policy as well and is about the same as it would be on a personal policy.

Interest rate on the loan though is a little higher, 4% vs. 2%. For me that was the only downside but that's easily offset by the tax savings.

 

[Ni9mm]

I think you should buy it with money you earn from your company but only if your profit exceeds your payables by 75%.

 

[warrior]

I cant use my truck "enough" to warrant the purchase through my biz. I do use company $$ to pay for and maintain my truck and take the little write-off I can. accountant can tell you what gives.

 

[Fred]

Yes Busa talk to your CPA, but we usually have people buy the vehicle personally an lease it back to the business...make sure you execute a valid lease...between you and the business...think of it as if yout business were leasing a vehicle from Ford...you retain personal ownership and the business is responsible for operational expenses of the vehicle along with paying the lease payment....this would all be spelled out in the lease...and the amount should be fair market...so $10k a month for a $50k truck is high...

Fred

 

[ManleyORV]

CPA needs to be onboard because they are the ones signing your return! But by purchasing the truck through the company, depreciating it 100% the first year and financing it, you will actually create a positive cash flow the first couple years. $55,000 truck, you save $20,000 if your in the 35% tax bracket, with a $900 a month payment, you will actually be cash flow positive until 24 months!

Another thing is you need a second vehicle that you own personally to take advantage of the truck 100% through the business. So you can "only" use the truck for business.

This is definitely the most tax advantageous way to go if you can.

 

[The Car Stereo Company]

CPA needs to be onboard because they are the ones signing your return! But by purchasing the truck through the company, depreciating it 100% the first year and financing it, you will actually create a positive cash flow the first couple years. $55,000 truck, you save $20,000 if your in the 35% tax bracket, with a $900 a month payment, you will actually be cash flow positive until 24 months!

Another thing is you need a second vehicle that you own personally to take advantage of the truck 100% through the business. So you can "only" use the truck for business.

This is definitely the most tax advantageous way to go if you can.

we are a 2 car family. so how does this work?

 

[linnwgetin]

Nos, with your type of business it is very easy to justify a vehicle to show off your products. My local audio shop had a porsche, that was all decked out with amps and speakers that sat in the showroom.

So I agree with the rest, contact your CPA and see what they say.

Or since your getting a white one and you wont get it till next June, if you want to donate some products for my white one I will gladly advertise for your shop!!

 

[The Car Stereo Company]

Nos, with your type of business it is very easy to justify a vehicle to show off your products. My local audio shop had a porsche, that was all decked out with amps and speakers that sat in the showroom.

So I agree with the rest, contact your CPA and see what they say.

Or since your getting a white one and you wont get it till next June, if you want to donate some products for my white one I will gladly advertise for your shop!!

haha, im sure you would "regrefully have to accept" wouldnt you....

 

[ManleyORV]

Yeah just have the convo with you accountant, let them know what you want to do.

Second have a convo with your bank or the dealership to make sure you can finance it through your company at less than a 5% rate if your tier 1 credit.

Third get an insurance quote through your company to make sure it's in line with a personal one.