Business Use % Vehicle Question

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  • Jenniferdawn
    Daycare.com Member
    • Sep 2011
    • 241

    Business Use % Vehicle Question

    We bought a new van in 2011 and are planning on using the actual vehicle expense method for taxes and to take advantage of the 100% bonus depreciation rule this year. One thing I'm not clear about though. The business use last year was 41%. Do I use that 41% for claiming the deduction for these 2011 taxes only and then come up with a new percent and recalculate each future year what the deduction is, or do I stick with the first years 41% for all 5 years of deductions?
  • Jenniferdawn
    Daycare.com Member
    • Sep 2011
    • 241

    #2
    Actually, I'm more confused than I thought. :confused: I'll give you the numbers and you can help me figure this out.

    My depreciation deduction for my van for 2011 is $1494.00. (37,352 (van cost) x .40 (business use) = 14,940 x .10 (first of 5 year straight line depreciation) = $1494.00) But the 100% depreciation rule says the deduction limit is raised by an additional $8000. Does that mean I add $8000 to the $1494 for my deduction? Or do I do 40% of the $8000?

    Please anyone, I'm needing some help here.

    Comment

    • Michael
      Founder & Owner-Daycare.com
      • Aug 2007
      • 7947

      #3
      I'm sure Tom will reply at some point. I placed some TAGS on the bottom left that may be helpful until then.

      Comment

      • TomCopeland
        Business Author/Trainer
        • Jun 2010
        • 3062

        #4
        car expenses

        Originally posted by Jenniferdawn
        Actually, I'm more confused than I thought. :confused: I'll give you the numbers and you can help me figure this out.

        My depreciation deduction for my van for 2011 is $1494.00. (37,352 (van cost) x .40 (business use) = 14,940 x .10 (first of 5 year straight line depreciation) = $1494.00) But the 100% depreciation rule says the deduction limit is raised by an additional $8000. Does that mean I add $8000 to the $1494 for my deduction? Or do I do 40% of the $8000?

        Please anyone, I'm needing some help here.
        I'm on vacation til Sunday. I'll reply to your question late Sunday.
        http://www.tomcopelandblog.com

        Comment

        • Jenniferdawn
          Daycare.com Member
          • Sep 2011
          • 241

          #5
          Thanks Tom! I appreciate it. I'll look at the tags too, though I've already done some searching and read Tom's books thoroughly and I'm still a bit confused.

          Comment

          • TomCopeland
            Business Author/Trainer
            • Jun 2010
            • 3062

            #6
            van depreciation

            If your van was purchased new -
            $37,352 x 40% business use = $14,940
            $14,940 x 10% = $1,494
            + $8,000 100% bonus rule = $9,494
            Depreciation deduction for 2011: 9,494
            http://www.tomcopelandblog.com

            Comment

            • Jenniferdawn
              Daycare.com Member
              • Sep 2011
              • 241

              #7
              Awesome! Thanks so much Tom. I thought I was understanding that right, but it seemed too good to be true. happyface

              Comment

              • Unregistered

                #8
                Depreciation of vehicle

                First time doing my own taxes and I am confused on this depreciation.

                The vehicle cost $43679.00

                Tax for 2008 depreciation $13977.00 100% business use
                Tax for 2009 depreciation $2850.00 100% business use
                Tax for 2010 depreciation $1775.00 100% business use

                Not sure how to figure out the depreciation for 2011 at 90% use or do I have any left to use? Thanks for any help that I can get

                Melissa

                Comment

                • TomCopeland
                  Business Author/Trainer
                  • Jun 2010
                  • 3062

                  #9
                  car depreciation

                  Originally posted by Unregistered
                  First time doing my own taxes and I am confused on this depreciation.

                  The vehicle cost $43679.00

                  Tax for 2008 depreciation $13977.00 100% business use
                  Tax for 2009 depreciation $2850.00 100% business use
                  Tax for 2010 depreciation $1775.00 100% business use

                  Not sure how to figure out the depreciation for 2011 at 90% use or do I have any left to use? Thanks for any help that I can get

                  Melissa
                  I can't figure out how these numbers were arrived at, so I can't tell you what you can depreciate in 2011. You need to ask the person who did this depreciation, or find a tax preparer to help you.
                  http://www.tomcopelandblog.com

                  Comment

                  • Atroya
                    New Daycare.com Member
                    • Feb 2011
                    • 56

                    #10
                    What about buying a used van?

                    Are there any deductions I can take for buying a used van that will be used partly for the daycare, partly for personal use?

                    Comment

                    • TomCopeland
                      Business Author/Trainer
                      • Jun 2010
                      • 3062

                      #11
                      Used van

                      Originally posted by Atroya
                      Are there any deductions I can take for buying a used van that will be used partly for the daycare, partly for personal use?
                      There is no difference in the rules when buying a new or used van. You can use the standard mileage rate or you can claim the business portion of the actual expenses of the van (including depreciation).
                      http://www.tomcopelandblog.com

                      Comment

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