John Dirks Jr Posted November 9, 2012 Report Share Posted November 9, 2012 I have been using the standard mileage rate to deduct the business use of my 98 Cherokee. If I buy another vehicle for business use and finance it, lets say with payments of about $400 a month, will I be able to deduct the monthly payments as well as the standard mileage rate for business miles driven? Quote Link to comment Share on other sites More sharing options...
Inspectorjoe Posted November 9, 2012 Report Share Posted November 9, 2012 No, that would be double dipping. If it's solely for business use, you won't want to use the mileage deduction. When deducting the entire expense, you can write off direct expenses such as gas and tolls, but there are depreciation rules to be followed, so it's not just a matter of deducting the monthly payment. Talk to your tax person. Quote Link to comment Share on other sites More sharing options...
ericwlewis Posted November 9, 2012 Report Share Posted November 9, 2012 as i understand it, it's either/or and not both. Mileage OR any and all expenses for operating your buisness vehicle for five years (depreciation during that time)from purchase LESS the percentage of personal use. But I don't do my own returns, it's just how it was explained to me. Quote Link to comment Share on other sites More sharing options...
AHI in AR Posted November 9, 2012 Report Share Posted November 9, 2012 If you buy a new vehicle every 3 to 5 years, you are probably better off taking the standard deduction. On the other hand, if you tend to buy a vehicle and drive it until the wheels fall off you will be far better off to claim actual expenses. Based on the fact that you are driving an older vehicle now (as I do) I'm going to assume that you tend to do just that. In any case, talk to your accountant. Quote Link to comment Share on other sites More sharing options...
John Dirks Jr Posted November 9, 2012 Author Report Share Posted November 9, 2012 What about depreciation? Is that included in either scenario? Quote Link to comment Share on other sites More sharing options...
John Dirks Jr Posted November 9, 2012 Author Report Share Posted November 9, 2012 BTW my Cherokee is good for a few more years at least. My position is that I need to put another family member into a car. The idea is to pass the Cherokee down and get the newer vehicle for business. Quote Link to comment Share on other sites More sharing options...
Bill Kibbel Posted November 9, 2012 Report Share Posted November 9, 2012 One or the other. I buy new every 3-4 years, so mileage is the best bet for me. Quote Link to comment Share on other sites More sharing options...
AHI in AR Posted November 9, 2012 Report Share Posted November 9, 2012 What about depreciation? Is that included in either scenario? It's included in the mileage scenario -- you can't add that in if you take the mileage deduction. You can if you claim expenses. Quote Link to comment Share on other sites More sharing options...
John Dirks Jr Posted November 9, 2012 Author Report Share Posted November 9, 2012 If I spend 20k on a business vehicle there would be the ability to deduct depreciation using the actual expense method. Considering I'm a part time inspector and drive fewer miles, that might make the actual expense method a bit better. Does this make sense? Quote Link to comment Share on other sites More sharing options...
Scottpat Posted November 9, 2012 Report Share Posted November 9, 2012 I purchased a new inspection urban assault vehicle this summer (Nissan XTerra) and I will as I have always done use the millage deduction. With 20k+ miles a year it just works best for me and it is easier for me to keep track of where I go and the mileage since my truck is also driven about 20% for personal use. Quote Link to comment Share on other sites More sharing options...
Tom Raymond Posted November 10, 2012 Report Share Posted November 10, 2012 Your an LLC. If you want to use actual expense your company has to own your vehicle. Does the company have enough revenue to absorb the loan, operating costs, maintenance, and insurance? As a fellow part timer, my guess would be no. There are advantages to the mileage method; when we went to my nephew's graduation in Lynchburg, VA we wrote off the mileage. My wife owns a printing business and his grandpa works for a paper distributor. They talked shop, it was a business trip. Quote Link to comment Share on other sites More sharing options...
John Dirks Jr Posted November 10, 2012 Author Report Share Posted November 10, 2012 Show me the rule that says the vehicle has to be in the businesses name in order to deduct depreciation. I've not heard of that. Hey Scott, I passed on the weekend warrior aspect and opted for the dufus mobile. Ford Trsnsit Wagon. It is an XLT Preium so dufusness will have some creature comforts. Quote Link to comment Share on other sites More sharing options...
gtblum Posted November 10, 2012 Report Share Posted November 10, 2012 You guys that are buying every three or four years should look at leasing. You won't take the immediate beating for depreciation as it rolls over the dealers curb. The mileage is factored into the lease and if you happen to exceed it, you'll pay less than you would be penalized for if you owned it and are trying to trade. You only pay taxes on the on the calculated lease, not the entire amount, like a purchase. The idea about paying for minor scratches ect at the end, is nonsense. They care way more about rolling new metal than about that stuff. You can upgrade more often without the headache of negotiating a trade. You should negotiate the price of the vehicle the same as you would a purchase before you tell them you want to lease. The TV ads are structured for profit. You can do better. Dont back down if they say they have to start over from the top. Make them work the lease on the numbers they agreed to sell it at. The folks who say they want to own what they pay for, end up owning little or nothing of value when they buy. If you think you do own it, try missing a few payments and find out who really does. If you've ever traded while there was still a balance, You already have leased. It's not for everyone. I always buy used trucks at the auction, and run them into the ground. They're just machines, to me. Quote Link to comment Share on other sites More sharing options...
Bill Kibbel Posted November 10, 2012 Report Share Posted November 10, 2012 You're comparing leasing to financing the purchase of a vehicle. Nothing gets a better deal than cash. Quote Link to comment Share on other sites More sharing options...
charlieb Posted November 10, 2012 Report Share Posted November 10, 2012 You're comparing leasing to financing the purchase of a vehicle. Nothing gets a better deal than cash. Amen Never finance a vehicle. Buy low mileage used and run it as look as it seems to be dependable. I wind up replacing every 3 or 4 years but I put 45 to 50k a year on a car. Quote Link to comment Share on other sites More sharing options...
kurt Posted November 10, 2012 Report Share Posted November 10, 2012 I bought new in 2010 when the auto industry was essentially begging people to take a car off the lot; what a great time to buy a car. They gave me a rock bottom price and a 60 month no interest loan. Free money for 5 years. Quote Link to comment Share on other sites More sharing options...
gtblum Posted November 11, 2012 Report Share Posted November 11, 2012 You're comparing leasing to financing the purchase of a vehicle. Nothing gets a better deal than cash. It's actually the other way around. The dealer makes money from financing. Lots of money. The banks offer rates to the dealers, you can't get on your own. The dealers bump the rate a point or two. Because of that, They're not giving away a car, truck, or whatever and not making up for the beating somewhere. Cash was never looked at as anything other than a loss, when I played that sport. Either way you look at it, cash or financing, If you're the type who wants a new vehicle every four years, you might be surprised at how much more you could have every two years for less money spent and more left in your account. You can also walk in and drop a one time payment on a lease. No finance charges for that. My keys, please. See ya when I come back for another. In 96 and 97 GM ran a $299 a month lease on blazers. They got rid of so many, and the market was so saturated with everybody's SUVs, the value of all of them dropped like a rock. People who bought got a very unpleasant surprise if they tried to trade. One year old blazers that stickered at $35K, were now worth 14K. Those who leased had nothing to worry about. I did an eleven year tour in mainly GM stores before I finally got torched from listening to buyer's bull$hit and lies, the hours, pushing snow off of every one of those POS every day of the week, no more demos for the sales department, (a big pay cut) and I was just tired of it. I got and education in financing, sales, business and psychology, that can never be taken away, and I'm thankful for that. Quote Link to comment Share on other sites More sharing options...
Marc Posted November 11, 2012 Report Share Posted November 11, 2012 You're comparing leasing to financing the purchase of a vehicle. Nothing gets a better deal than cash. It's actually the other way around. The dealer makes money from financing. Lots of money. The banks offer rates to the dealers, you can't get on your own. The dealers bump the rate a point or two. Because of that, They're not giving away a car, truck, or whatever and not making up for the beating somewhere. Cash was never looked at as anything other than a loss, when I played that sport. Either way you look at it, cash or financing, If you're the type who wants a new vehicle every four years, you might be surprised at how much more you could have every two years for less money spent and more left in your account. You can also walk in and drop a one time payment on a lease. No finance charges for that. My keys, please. See ya when I come back for another. In 96 and 97 GM ran a $299 a month lease on blazers. They got rid of so many, and the market was so saturated with everybody's SUVs, the value of all of them dropped like a rock. People who bought got a very unpleasant surprise if they tried to trade. One year old blazers that stickered at $35K, were now worth 14K. Those who leased had nothing to worry about. I did an eleven year tour in mainly GM stores before I finally got torched from listening to buyer's bull$hit and lies, the hours, pushing snow off of every one of those POS every day of the week, no more demos for the sales department, (a big pay cut) and I was just tired of it. I got and education in financing, sales, business and psychology, that can never be taken away, and I'm thankful for that. I might be mistaken but Bill seems to be referring to the deal the buyer gets, not the car dealer. Marc Quote Link to comment Share on other sites More sharing options...
gtblum Posted November 11, 2012 Report Share Posted November 11, 2012 So am I, Marc. Maybe I didn't put it the right way. Car dealers don't like cash. You're not going to get a better deal because you're paying cash. Quote Link to comment Share on other sites More sharing options...
kurt Posted November 11, 2012 Report Share Posted November 11, 2012 That's right. The money isn't in selling cars, it's in the deal structure. Cash is the last thing a dealer wants. Quote Link to comment Share on other sites More sharing options...
rkenney Posted November 11, 2012 Report Share Posted November 11, 2012 The car salesman makes his commission off profit. His percentage of profit may even increase over a certain profit level. Profit occurs through three parts of the transaction: Purchase price Trade in allowance Financing Change or eliminate any of these (no financing on a cash deal) and they just add their profit elsewhere. Employee pricing, No dicker pricing, etc. are all just scams (or at least diversions) profit has already been locked into the transaction. Best pricing is available when the manufacturer (not the dealer) reduces cost. Dealer can then assure his profit margin but offer lower price to you. Quote Link to comment Share on other sites More sharing options...
Jim Morrison Posted November 11, 2012 Report Share Posted November 11, 2012 I just bought a 2010 Tacoma. I told the sales guy I was financing it until we settled on a number for the truck and the trade-in. Then I told him I'd changed my mind and would be paying cash. He was visibly displeased. He even told me that I wouldn't have gotten the deal I got if he'd known I wasn't going to finance it. Quote Link to comment Share on other sites More sharing options...
gtblum Posted November 11, 2012 Report Share Posted November 11, 2012 Employee pricing, No dicker pricing, etc. are all just scams (or at least diversions) profit has already been locked into the transaction. Employee pricing is for real. We hated those guys. I once asked a GM employee why he felt he should pay anything less than sticker for a vehicle he built and should be proud to show the rest of the world it was worth every nickel they were asking for. The man had no shame. Quote Link to comment Share on other sites More sharing options...
Scottpat Posted November 12, 2012 Report Share Posted November 12, 2012 I purchased my Xterra through Nissan's Employee/Family/Friends program (My wife has a coworker friend and her husband is a Nissan VP at their headquarters) and through this program it took off $6K from the sticker price. I was a very happy camper! The price for the truck came from Nissan HQ and not the dealer. I had to take delivery at a specific dealer who handles all employee purchases, it took two weeks after I placed the order and then they come straight from the factory and not the dealers inventory. The only kicker was that I had to use Nissan's finance program, but at 1.7% interest I did not have a problem with it. Quote Link to comment Share on other sites More sharing options...
davidlord Posted November 12, 2012 Report Share Posted November 12, 2012 Craigslist. Cash is king. I just bought a 2006 basic GMC Canyon SL for one of the pest control route techs for $7000. It has 26000 miles on it, automatic, vinyl floors, A/C and brand new tires with the nipples still on them. Not a scratch or ding on the thing (yet). Quote Link to comment Share on other sites More sharing options...
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