Make Your Next Sport Utility Vehicle Tax Deductible with Section 179

By
Real Estate Agent with BANCROFT REALTY LLC 0637667

Section 179 Deduction Overview

People complain about our tax system.   I actually like our system.  It favorsSection 179 Qualifying Vehicle those who know the rules.  My favorite tax rule can be found in IRC Section 179.  This section of tax code defines the accelerated deductions available for tangible personal property used for business use.  It is a great way for the government to help you purchase the capital equipment you need to run your business.  Section 179 is part of the stimulus package enacted in 2008 and it keeps getting extended.  You immediately can claim up to $25,000 deduction on a Section 179 qualifying vehicle.

Section 179 Limits

The yearly Section 179 deduction limit is $500,000 per year.  You may purchase up to $2,000,000 of qualifying property each year.  The bonus deprecation has been extended.  It is 50% in 2016 and 2017, 40% in 2018 and 30% in 2019.

 

Business Income Sources

1)     Net income or loss from your business

2)     Net income or loss from the spouses business

3)     Proceeds from the sale of assets from you and your spouse’s business

4)     Interest income from you and your spouse’s business

5)     Net income or loss of your rental property business

6)     Gains or losses from the sale of rental property which qualify for section 1231

7)     And finally, you and your spouse’s other W-2 earned income

That is a lot of income.   I purposefully saved the W-2 income for last.  It is the source of the most confusion (I must reiterate here that I always advise using a tax specialist.  I do not give tax advice.)  

Married Tax Payers and Section 179

The IRS treats you and your partner as single taxpayer when you file jointly.  If you file separately, you must declare how you are going to account for the Section 179 deductions.

Section 179 Example

Your business has $10,000 income for the year and your spouse earned $75,000 in W-2 income.  You buy a qualifying SUV for $37,500.  Your total income is $85,000.  You deduct the maximum allowed $25,000 for the vehicle. You are under the $500,000 limit.  Your taxable income is now $60,000.  If you are in the 30% tax bracket, you just saved $7,500 in federal income taxes. 

 

Section 179 is a rule you definitely want to know, understand and use.  It will help save you tens of thousands of dollars in your business.  

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Do not miss out when I discuss the rules and game plan on how to make these deductions real in your life.

 Published at http://blog.jodywallrealtor.com/business/tax/section179-tax-deduction.html

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Rainmaker
1,679,012
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

thanks for this very helpful information - it is always good to take advantage of the tax code

Aug 27, 2016 09:55 PM #1
Rainmaker
1,679,012
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Welcome to ActiveRain! I hope you enjoy it here - it is obvious that you have lots to contribute! 

Aug 27, 2016 09:55 PM #2
Rainmaker
1,015,377
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

JODY WALL 

Great content. As a suggestion I suggest you use same fonts. This is accomplished with Tx(clear formatting) next to ABC(spell checker), hover the sentenses with same style font as earlier paragraphes. 

 

Section 179 Example

Your business has $10,000 income for the year and your spouse earned $75,000 in W-2 income.  You buy a qualifing ....

Aug 28, 2016 12:24 AM #3
Rainmaker
1,015,377
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Since this is infomercial  blog , at the end of your blog I suggest adding your business affiliation 

Jody Wall

your investment property expert in XXXX

backlink the blog to your website to enhance indexing visibility.

Thanks

Sam 

Aug 28, 2016 12:29 AM #4
Rainmaker
849,315
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

You must be the only person the country who "likes" the tax code LOL - thanks for sharing your thoughts

Aug 28, 2016 12:34 AM #5
Rainer
223,685
Jessie Cochran
Counts Real Estate Group, Inc. - Panama City, FL
Panama City Realty Group

I love tax deductions - I think my accountant is tired of me asking "Is that tax deductable?"

Aug 28, 2016 01:27 AM #6
Rainmaker
3,173,223
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Jody Wall,  Thanks for the information and make it a great day!

Aug 28, 2016 04:06 AM #7
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Jody Wall

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