Re: I purchased a car for my business, under my business name, and it is registered under my business name. Where can I deduct the cost of this vehicle?

I purchased a car for my business, under my business name, and it is registered under my business name. Where can I deduct the cost of this vehicle?

posted

The vehicle is NOT a deduction per-se. It is a business asset, since it is used on a recurring basis in the production of business income.

The cost of the vehicle is depreciated (not deducted) over time - usually 5 years from the date the vehicle was placed in service.

You'll enter everything concerning that vehicle in the Business Vehicle Expense section.

If you are offered the SEC179 deduction (which really isn't a permanent deduction) or the Special Depreciation allowance, if you will be selling or disposing of that vehicle within the next 5 years after it's placed in service, then I recommend you do "NOT" take the SEC179 or SDA for that first year. It may help you now. But if you end up selling or otherwise disposing of the vehicle say, after two years, the depreciation recapture will *KILL* you financially.