This is the last week of the year for TAX-Savings Auto Purchases.
If you need new vehicles for your fleet, there may be no left-over 2014 models in your color, but grab a 2015 and take the depreciation or lease payment.
NEW CAR-AUTO TAX deductions rules for 2014
The IRS has changed the rules on Section 179 for 2014. In years past, the total allocation for business equipment was up to $500,000.00 for capital equipment purchases. This often used Section 179 was bundled with the “BUSH-era” FARM BILL, which allowed for vehicles with a gross vehicle weight of 6,000 lbs, to be categorized as work vehicles or vehicles used in the performance of business. Realtors, real estate agents, construction companies and almost anyone running a business and using a vehicle for work, deliveries or otherwise, found a new Chevy Tahoe, Suburban, GMC Denali, Cadillac Escalade, Land Rover Range Rover, Ford Expedition, Hummer H2, Dodge Ram truck and attractive new piece of capital equipment.
The economic crash of 2008 cut a lot of year-end business-bonus car buying as companies down-sized their fleets or kept existing vehicles in repair as long as possible. Today the economy is full-steam ahead and the aging fleets have given up the ghost. It is no longer economically viable to keep pouring money into 150,000+ mile rides with old technology and poor fuel economy. Interest rates on auto loans are at an near all time low, so take advantage of some profit and get some new wheels.
While the IRS has cut the 2014 Sec. 179 to $25,000 in total write-off, you can still make some killer lease and finance deals and utilize the itemized depreciation schedules to take advantage of end of the year car/truck deals for your business. Cash or trade down payments still count on the balance sheet as equity.
Lease your car back to you business.
Not wanting to share your private company P & L with the leasing companies or dealerships? Lease the vehicle in your own name and lease it back to your company and/or let the company make the payments. This may also help with auto insurance coverage if you are the only company staffer driving the vehicle on a regular basis. REMEMBER to keep accurate mileage logs and service records.
While the IRS has always had the ability to cross reference your vehicle service records for matching mileage counts during an audit, many folks missed this paper-trail as a way to keep their own mileage logs up to date. Now is the time to rectify your appointment logs with your vehicle miles, gas, toll, parking stubs, service records, repair bills, insurance premiums and monthly car loan statements while gathering your receipts for your accountant.
As always, this information is for entertainment purposes only and you should discuss your personal or professional tax situation with your tax preparer, BEFORE you make any major purchases or withdrawals from your IRA, 401K or other tax shelter plan.
Sarah Lee Marks is a consumer car advocate, published author and auto enthusiast with over 25 years of automotive experience. If you have a question feel free to contact her at email@example.com Advice is always free with MyCarlady.