Vehicle Expense/Depreciation Question for Tom Copeland

[frugalmama4]

Hi Tom, follow up question form my previous question.


I'm claiming the actual expense method for a 100% business use vehicle...so would all expenses for this vehicle be deducted at a 100% (gas, insurance, repairs etc.) this is a new auto purchase in 2012.

Deprecation-since the auto is used a 100% for business would I be entitled to deducted the entire purchase price ($30,000) or will it still be limited to the limitation amount ($11,160)?

I'm trying to see over all for my "business and family" if its worth having a second auto with a monthly note.

Thanks!

[Michael]

https://www.daycare.com/forum/showthread.php?t=44607

[TomCopeland]

Vehicle

Hi Tom, follow up question form my previous question.


I'm claiming the actual expense method for a 100% business use vehicle...so would all expenses for this vehicle be deducted at a 100% (gas, insurance, repairs etc.) this is a new auto purchase in 2012.

Deprecation-since the auto is used a 100% for business would I be entitled to deducted the entire purchase price ($30,000) or will it still be limited to the limitation amount ($11,160)?

I'm trying to see over all for my "business and family" if its worth having a second auto with a monthly note.

Thanks!

If you have the records to show that you use the vehicle 100% for your business, then you can deduct 100% of insurance, repairs, gas, etc. Car depreciation is tricky. Since the car is being used more than 50% for your business, you can use the Section 179 rule on For 4562, Part I. But you are always limited to the $11,160 amount for depreciation in the first year. It's better to use the Section 179 rule than the 50% bonus rule, because you will get higher depreciation deductions faster.