4. Buy a Heavy Truck
In 2003, Congress passed what's known as Section 179 — a tax code that allows small-business owners and the self-employed to write off up to $102,000 (in 2004) for the purchase of a heavy truck or SUV, provided it weighs at least 6,000 pounds. To claim the full deduction, drivers must use the vehicle for more than 50% of their business needs. Unfortunately, this perk expires in 2006, when the deduction shrinks to $25,000.

Most SUVs — even the heavy-duty ones — cost less than $102,000. But if that Cadillac Escalade puts your total business equipment bill over the limit, you could take advantage of another related tax break: a bonus depreciation of 50%. It can be used in conjunction with Section 179, but it expires at the end of 2004.

:angry:

I'm not a green guy, but I dont see the sense in encouraging folks to buy equipment they dont need just to get a tax break.

 

If you own a general contracting firm, or any small company where a truck/suv is used for business this is a very useful and beneficial tax break.

 

It is these tax breaks that can be the difference between earning a living, or going bankrupt. It is a very good deal though, we get to write off 40% in year 1 then 25% straight line after that (unless the car is classed as green i.e. electric or runs an engine smaller that 1.2l, then you can write off 100% in year 1)

I know my tax lessons would come in useful (just need to do the USA ones now........ )

 

I agreee, this meant more for guys that have a small operation contracting firm, and use trucks such as these.

 

This is why you see a TON of H2's on the road. I was talking to a dealer about this and they were getting people in H2's qualifing the commute as that 50%.

 

Ghost, you've hit the nail on the head. I have no problem with a legitimate need for a vehicle like that, but about the only thing an H2 is good for is shuffling 4 people around and moving as much air in two opposite directions as possible. I dont think they had H2's in mind when they wrote the tax break on the books (call the feds short-sighted, and these guys smart). However I see it as abuse on par well with ummm... never mind (or insert flamatory statement here), just seems like abuse to me.

 

i didnt think you could call your commute a business expense if had to travel to/from ur job.

id like to thatd be close to 100 mi a day... even so i wouldnt buy a hummer or any minivan on steriods that gets crappy mpg.

 

trust me- good idea

Before I came to civilization, 200 mile a day commute- $30 a day for gas. No thank you and never again- bronco with a 302v8 that gets about 3 miles a gallon.

 

I agree. I see these things all day long. At this point I see more of these than I would like to on the road. I know a few business owners that own them.

 

Yes, commutes can be considered business expenses in the US. Even I know that and I don't live there. I'm not sure whether you technically can, but I know people who do.

 

so in a way you are calling me stupid since you know that and dont live here, then you go on to say you dont know if is really legal. wow that makes sense.

 

Let's all settle down

However, normal commutes are not a business expense, nor can they be deducted.

http://moneycentral.msn.com/articles...asics/1396.asp

See there for more information. That is spot on and should (hopefully) settle any disagreements.

 

Whoa, someone got told!

I see H2's with Business decals on the windows around here ALL the time... and it's always a woman driver with kids going to a little-league game.

But, what's sad is that people tend to forget what H2's are REALLY supposed to be used for and ARE good for... off-roading.

 

Lots of people put road tolls, mileage, clothes, etc as business expenses on the tax sheets. Just how willing you and your accountant are willing to bend the rules.

You need to get audited first. In 1994, the IRS audited 0.08% of ALL tax returns filed. With odds like that, who wouldn't risk get half off a $60,000 car?

 

Umm, Me. I'm not risking.

If I had a landscaping business, contracting business, etc. That required me o DRIVE as part of my job, sure. This includes deliverymen.

But me, no.

 

Some people obviously don't have your morals, Jeff.

 

Its not too hard to get this tax break

This previous summer, I was thinking about starting to freelance in graphic design...a business permit for my county is $5 and is just a one page form. I would've bought a VW Touareg, as it pretty much fits my needs (I'm not sure if it weighs over 6K lbs), but than I saw the Mustang and seeing I still have half a year of school left, I decided against it...but I might dive in late 2K5.

This tax break is a good thing imo, but it does leave some pretty big holes open and I'm sure many people are driving private cars my fellow Americans paid for...

 

An Afterthought...

Using an unique truck is also great for advertising. A Porsche Cayenne or H2 is a major eye catcher and might bring in extra sales.

 

What do you guys think about gtting rid of tax breaks like the above and going the flat tax route?

 

There will always be tax breaks in one form or another. There are a lot of small business out there that rely on them. A flat tax would be good in theory (I'm all for it), but we all know that theory and reality are complete opposites when it comes to taxes. The politicians in general would find some way to mess it up IMO.