Writing Off Your Car Purchase

2 Replies

Hello people of BiggerPockets, I plan to be a realtor sometime soon. I just learned that realtors are self-employed and file their taxes on a 1099 form. This means I can write off expenses related to my work. Hence, I would like to know that if I were to buy a car with cash upfront for my realtor work, can I write off the whole purchase on my taxes?

@Makhwarand Khan     Business use of car can be deductible in 2 ways, actual OR standard mileage. The standard mileage rate is subject to certain rules and you must choose to use it on the first year you have the car then on later years, you can choose between the 2 methods whichever will give you the most deduction. Please note that you will only able to deduct to the extent of your business mileage so it is important to keep track of your business & personal mileage if you use the car for both. There are good apps out there to help you track your mileage. 

To answer your question, no you cannot write off the whole purchase on your tax but only the allowed depreciation expense for the tax year for you car. Please see this IRS topic for more info. 

If unsure, always consult a CPA for proper guidance and tax strategies.