Section 179 - Truck purchase

[kobiBear]

Hello - 

I recently formed an LLC for my photography business and would like to purchase a new truck using Section 179 - it will be used for both personal and business. Should the vehicle be bought, titled, insured under the LLC or can I use my own name? Also, does it matter where the funds come from...ie do I need to have a LLC biz checking account and credit card for these purchases?

Thanks!

[Critter-3]

If this is a unincorporated single member LLC filing a Sch C on the tax return then it doesn't matter who the truck is titled under or which bank account the money comes from since it coming from you either way ... it would be like deciding which pocket of your pants you reach into for the cash ... all the pockets are  the same.  

[Anonymous_]

I agree with @Critter-3, 100%.

With respect to titling and insurance, you should certainly consult with your insurance agent.

Further, with respect to Section 179, be aware that there are dollar limits and income limits.

See https://www.irs.gov/publications/p946#idm140602895002192

You might also want to check into bonus depreciation (the special depreciation allowance).

See https://www.irs.gov/publications/p946#idm140602894637136

[kobiBear]

Makes sense. Thanks for the reply!

In order to use the deduction, it must be used 50%+ for business. How is this verifiable and quantified in the eyes of the IRS?

[Critter-3]

Do some reading here about record keeping :     https://www.irs.gov/publications/p463

[Mike9241]

the IRS is going to want to see mileage logs if you are audited.   doesn't matter whether you use section 179 or 168K or neither.   for vehicles required info includes total mileage, personal and commuting mileage, and business mileage. failure to keep adequate records should the IRS come calling could result in a disallowance of all vehicle expenses including its cost,  The same is true for other expenses of your business - invoices, canceled checks or other proof of payment. then you get hit with taxes, penalties and interest.