I have searched many conversations about the Sect. 179 / first year business write of on biz vehicle and gleaned a lot of good info already.
Now I just have questions based on our example that I didn't see answered exactly in prior notes.
We realized my hubby's business using a smaller car just isn't working anymore to carry equipment for his jobs and we want an SUV and because we have a profit for his single member LLC, this year it may be wise to upgrade his car now for the 179 write off before end of year, as with it we will still have profit left over.
We're looking at both over 6000 lbs and under SUV. (I played with fake numbers in 2021 software with a sample tax return by adding a car to last year's numbers and it seems the bigger write off is over 6000 lbs. Not that we'll choose a car based on that, but it was interesting to see.
The examples I tried in last year's Turbo Tax, to play with numbers showed an example of:
Purchase price: $25,000
The write off of for under 6000 came to about 12,700 and the write off for over 6000 lbs SUV + came to 17,500 (using 70% in both cases).
If we, for ex... did 17,500 this year as 70% of purchase price for 70% use for biz... is there any further deduction in future years less to account for depreciation since the max allowed IS 70% of the 25k? Or is this a one time thing?
If we bought something at $30,000 and it still limits this year to 17,500... does the mean the balance gets depreciated (70% or otherwise, of the $5000 left over) in future years (based on the year's actual mileage % of personal vs business)?
I found out in these notes I read that if we do the large deduction this year, we have to do actuals for life of the SUV. So I'm trying to evaluate what kind of write off would be included, that means in the future (gas, tires, maintenance, insurance etc... at 70% too.) But would there also be a car depreciation left over (especially if we go over 25k and max out at 17,500 this year.)
I did read one example where someone drove a ton of miles a year and I could see where that would not be a wise idea to take a bulk write off at one time. But we probably drive about 5000 biz miles. Not 26,000 in the other example posed in another question on here.
Lastly... I had one very odd thing happen in calculation. On a separate screen asking for the sales tax on the purchase price to be added (as "property tax portion") I did as an example $1500 and it lowered our tax bit a bit more. However... if I put in $1600 in that same line instead, it actually drastically changed our whole tax situation for the worse. It added costs back into the federal taxes that surpassed even the $1600 we spent on sales tax. What would have caused that?
Actual # original tax due was $266 due to federal with 17,500 being written off. But adding 1600 of tax. changed amount due to $2016... a difference of $1750 now due for having entered a $1600 write off? At the same time, the GA state tax refund went up $60. But that's still a net loss of $1690. Can anyone explain why the would happen?
Thanks for any assistance. So much useful info on here already.
