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Hi all,
I'm a noob here but we're looking at getting a vehicle for our business as I always hear about everyone writing off the vehiles so it's "like their free in the long run"... so I wanted to do research into this and the below is what I've come up with. Can you take a look at this and see if I'm understanding and calculating this correctly? This is just a basic setup just so I can understand how it works.
Business
Entity: LLC filing as S-Corp
Type: Home Office Business
Gross Income $60,000
Net income after expenses $45,000
So per the tax bracket:
“$19,051-$77,400 $1,905 + 12% of the amount over $19,050”
So we would be paying $7076.40 for the year.
----
Now per section 176 if we get the following vehicle for the business
Vehicle
Used Large 6000# SUV $30,000
Used 100% for business
Per the code we can deduct the entire $30,000 immediately
So we would take the $45,000 net income -$30,000 = $15,000
So per the tax bracket:
“$0-$19,050 10% of taxable income”
So we would be paying $1,500 instead of $7076.40 which would save $5,576.40
And because we depreciated 100% at the first year, there will be no other deductions after that for the years following.
---
Is the way I’m taking this correct? So basically the large SUV would cost $24,423.60
Thanks all for the help
I'm a noob here but we're looking at getting a vehicle for our business as I always hear about everyone writing off the vehiles so it's "like their free in the long run"... so I wanted to do research into this and the below is what I've come up with. Can you take a look at this and see if I'm understanding and calculating this correctly? This is just a basic setup just so I can understand how it works.
Business
Entity: LLC filing as S-Corp
Type: Home Office Business
Gross Income $60,000
Net income after expenses $45,000
So per the tax bracket:
“$19,051-$77,400 $1,905 + 12% of the amount over $19,050”
So we would be paying $7076.40 for the year.
----
Now per section 176 if we get the following vehicle for the business
Vehicle
Used Large 6000# SUV $30,000
Used 100% for business
Per the code we can deduct the entire $30,000 immediately
So we would take the $45,000 net income -$30,000 = $15,000
So per the tax bracket:
“$0-$19,050 10% of taxable income”
So we would be paying $1,500 instead of $7076.40 which would save $5,576.40
And because we depreciated 100% at the first year, there will be no other deductions after that for the years following.
---
Is the way I’m taking this correct? So basically the large SUV would cost $24,423.60
Thanks all for the help