Purchasing a vehicle - how to deduct it/use bonus depreciation

Purchasing a vehicle - how to deduct it/use bonus depreciation

Lender · Orlando, FL · Member since 2018 · 173 posts · 66 votes

Hey everyone.  I will be needing to purchase a truck in the next weekend or two and plan on purchasing it and using bonus depreciation to offset my income.  The vehicle will not be over 6,000 lbs (likely a Toyota Tacoma) so I know there will be a limit on the amount of bonus depreciation I can recapture.  I do not have a business bank account/business credit card set up yet, but is that necessary to be able to purchase the vehicle and get the tax benefits when I buy it?  Do I purchase it now with money saved up in my bank account and then transfer the vehicle to be owned by my company at a later date, or does this all need to be set in place before buying?  If you have any questions on the specifics, please let me know.  I am sorry if this was unclear.

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  • Accountant · Hunt Valley, MD · Member since 2016 · 49 posts · 17 votes
    4y

    More than how you pay for the vehicle, it's more important in how you use the vehicle (and documentation - the fun stuff, right?) to support taking the bonus depreciation. For 2022, $19,200 is the limit.  Without bonus, it's $11,200.

    I don’t usually recommend my clients take auto title in the business.  

  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    4y

    Keep track of the miles driven during the year for business / personal purposes.

    Depending on the cost of the truck, you will either be using the mileage approach or the actual approach.

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