Section 179 help.

USA Discussion in 'General Tax Discussion' started by Integraoligist, Oct 6, 2018.

  1. Integraoligist

    Integraoligist

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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
     
    Integraoligist, Oct 6, 2018
    #1
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