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You can reap major tax savings with the heavy vehicle and home-office combo.<\/p>\n
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The heavy vehicle produces quick deductions. The home office that qualifies as a principal office eliminates commuting miles, and such an elimination can dramatically increase your business-use percentage of vehicles.<\/p>\n
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For example, say you bought a $50,000 vehicle that you use 60 percent for business. Your depreciation and expensing elections apply to $30,000. But if you can increase your business percentage to 90 percent with a tax code\u2013defined principal office in your home, your base for tax deductions increases to $45,000\u2014that\u2019s a $15,000 increase, and you did not spend a penny or drive a mile farther to capture it.<\/p>\n
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The heavy vehicle strategy requires a gross vehicle weight rating (GVWR) of more than 6,000 pounds. If tax law classifies the heavy vehicle as an SUV, your Section 179 expense deduction is limited to $25,000; otherwise, your limit is subject only to the $510,000 ceiling.<\/p>\n
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On a heavy SUV, the $25,000 ceiling produces benefits on both new and used vehicles.<\/p>\n
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If the SUV is new (not used), you qualify for the generous 50 percent bonus depreciation. This can add up quickly. For example, on a new SUV with a GVWR greater than 6,000 pounds for which you have a business cost (based on your business percentage) of $50,000, you can qualify for a first-year write-off of up to $40,000 for the cost of the vehicle alone.<\/p>\n
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The combination strategy of a heavy vehicle and a qualifying home office applies to your business regardless of business form.<\/p>\n
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If you would like to drill down on this strategy, please don\u2019t hesitate to give us a call at 847-593-7558.<\/p>\n
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You can reap major tax savings with the heavy vehicle and home-office combo. The heavy vehicle produces quick deductions. The home office that qualifies as a principal office eliminates commuting miles, and such an elimination can dramatically increase your business-use percentage of vehicles. For example, say you bought a $50,000 vehicle that you … <\/p>\n