In 2016 we purchased a used 2006 Toyota Land Cruiser, single cab with tray. Its primary use is for business but can be used for personal also. How do I count expenses?

[kinesngin_ta_ngo]

A couple of questions, but there are likely things you might think of that I won’t which could help us in evaluating things. 

• Can we write the whole expense off as being for “business”?
• If we were able to write off the whole thing, how would we handle other future expenses for it, like fuel and upkeep/maintenance? 
• How does depreciation of a vehicle work?  Is it required?  Is it recommended?

Thanks.

[RichardG · Accepted solution]

It may be possible to deduct all or a portion of the vehicle cost as a Section 179 deduction.  TurboTax will help you determine if that's feasible in your case.

You basically have two options with business autos:

• take the standard deduction based on miles (for 2016 the deduction is 54 cents a mile)
• deduct depreciation (including the Section 179 deduction) plus your actual expenses for fuel, maintenance, etc

Please follow these link for more information.  https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/Business-Use-of-Vehicles/INF1207...

https://www.irs.gov/taxtopics/tc510.html

[kinesngin_ta_ngo]

I'm trying to understand this.  So the cost of the truck would be completely a personal expense.  The recuperation of those costs is received either through Standard Mileage Rate of business miles (which includes depreciation) OR through business percent of actual costs, including depreciation.  Is that correct?
Still trying to further understand this... So in effect it is not the cost of the vehicle that is deductible, but (simplified) the cost of the vehicle minus the resale value of the vehicle at the time it might be resold.  The yearly "depreciation" amounts is an estimate of what that decrease in value would be over the years, and it is that depreciation that is a deduction.  Is that correct, in a simplified way?
Thanks much.

[RichardG]

You've explained a fairly complex concept quite well.

[kinesngin_ta_ngo]

Thanks for your help