mikedahammer
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- Jan 13, 2017
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lawdog has given the best advice and pretty much spot on.....
If you bought the truck new for $70K in the first quarter of 2017 (half-year convention), you will be able to write off $52K in the first year. To me that's not bad but that is also assuming you use it 100% for business, have business net income and you writing the truck does not drive a net loss for the business for that year and that you will not exceed the max section 179 from other assets or placed in service lots of expensive assets that year. As you can see there are lots of other factors/requirements which you may or may not run into based on your tax circumstances.
It is important to keep in mind that not writing it all off the first year does not mean you are losing the deduction; it is just timing on when and how to deduct it. Also, make sure you check with the state you live in as some states limit the amount of Section 179 and may or may not conform to bonus depreciation.
The $52K deduction would be calculated as follows:
$70,000 minus the max Section 179 for this vehicle (assuming you have business net income) of $25,000 (treated same as an SUV for tax purposes). $45,000 is left minus 50% bonus depreciation of $22,500. $22,500 is left minus regular depreciation for half year asset of 20% which is $4,500.
25 - 22.5 - 4.5 = 52K written off in first year. In year two you would get $7,200.
If you bought the truck new for $70K in the first quarter of 2017 (half-year convention), you will be able to write off $52K in the first year. To me that's not bad but that is also assuming you use it 100% for business, have business net income and you writing the truck does not drive a net loss for the business for that year and that you will not exceed the max section 179 from other assets or placed in service lots of expensive assets that year. As you can see there are lots of other factors/requirements which you may or may not run into based on your tax circumstances.
It is important to keep in mind that not writing it all off the first year does not mean you are losing the deduction; it is just timing on when and how to deduct it. Also, make sure you check with the state you live in as some states limit the amount of Section 179 and may or may not conform to bonus depreciation.
The $52K deduction would be calculated as follows:
$70,000 minus the max Section 179 for this vehicle (assuming you have business net income) of $25,000 (treated same as an SUV for tax purposes). $45,000 is left minus 50% bonus depreciation of $22,500. $22,500 is left minus regular depreciation for half year asset of 20% which is $4,500.
25 - 22.5 - 4.5 = 52K written off in first year. In year two you would get $7,200.
