Any tax breaks left for buying an H2?

[robd1]

Hi guys, I?m about to buy an H2 but I was wondering if any of you were up to date on this years tax laws. I remember hearing that tax breaks for business owners that bought an H2 (or anything over something like 6000 lbs) were nuked last year. Are there any tax breaks left at all for business owners that purchase an H2 in ?06?

Rob

[HummBebe]

You can write off the Sales tax. But I that's about it.

[robd1]

Oh well, that's better than nothing. I read somewhere that there was still a $10K deduction but they must have done away with that if it ever existed. I was just checkin

Rob

[mikejr]

Check with your accountant, the tax break for heavy SUV's still exists albeit a bit smaller than past years. If I recall correctly our corporate CPA said we can write off between $24K and $28K in the first year of ownership and then the balance in subsequent years on a proportional basis. We've used the heavy SUV writeoff extensively in the past 3 years.

[Racer-X]

First, you must be business owner or use it for work (commuting does NOT count).

You can write off the sales tax if your not using for business, but, if your state income tax withholding is more than the sales tax you won't get any benefit.

Second, the laws DID change recently. Used to be you could write off 100% in the first year. Now it's limited to 25K the first year and you depreciate the balance over time.

Heres more info - http://www.irs.gov/businesses/small/...137022,00.html

[mikejr]

good clarification there, guess i just assumed that they would have known about having to use it for business/work purposes. That deduction has saved us a ton in tax exposure over the years, lets just hope they dont reduce it even further with the pressure from the treehuggers.

[DanC]

I thought you could only get the tax break if the use was directly related to the business. We have a travel agency so we wouldn't qualify?

Dan

[mikejr]

well the best thing is to consult your CPA for advice....i have a real estate company and the H2 is logo'ed up and i use it daily for showings...

[Mr. I - Man]

Warning!!!

I am being audited as we speak! (they are really trying to Fvck me on this)
make sure you can account for the business miles with a log book and that you use the H2 at least 50% of the total mileage as business do not include commuting miles and also have receipts ie. oil changes and service to prove odometer readings on certain dates.

[robd1]

I won?t have a definitive answer as to what (or if) there is a tax break for business owners but here is what I found yesterday in addition to the posts so far. I thanks you all for your posts.

My CPA is off this week but I called his firm and spoke to another CPA. I don?t know the guy but he told me that ?to his knowledge?, the write-off for business owners is still in effect. He said the 100% write-off was nuked a year or 3 ago (which we knew) but there still should be a ?significant write-off for business owners?. This didn?t tell me much and I couldn?t really ask the guy to look it up and give me a definite answer since I?m not his client and not paying him. Anyway, it?s another positive confirmation that there is some kind of a decent a tax break out there for business owners. I won?t know the full details until Monday when my CPA comes back from vacation but I will post here what he finds and he is good.

I will agree with Mr. I-Man that whatever tax break is out there, you better be able to back it up on paper in case you get audited. If commuting to and from work does not count in the IRS?s eyes then it looks like you will need to have been keeping track of mileage, gas receipts and possibly dated receipts from the places you buy from to prove it?s legit. I won?t know the details until my CPA gets back but I?ll be happy to post what I find. Badging the vehicle for advertising might be another route and I?d happily do so if it saved me seriously money while advertising my business. I?ll check it out and post my findings next week.

By the way, for any business owner that has claimed this first-year deduction, does it absolutely have to be a brand new ?06/07 vehicle or does buying an ?05 with under 10k miles still count?

Rob

[OrangeCrush]

Originally Posted by robd1

whatever tax break is out there, you better be able to back it up on paper in case you get audited. If commuting to and from work does not count in the IRS?s eyes then it looks like you will need to have been keeping track of mileage,

Rob,

Thus the reason why when going through the menu for odometer, the H2's have a "business" and a "personal" way of tracking hours, mileage, gas used, etc....

BTW, mine is an '03 and the acct claimed whatever % was legal. (in reference to your '05 with 10K miles or under question)

Mark

[Racer-X]

Originally Posted by robd1

I won?t have a definitive answer as to what (or if) there is a tax break for business owners but here is what I found yesterday in addition to the posts so far. I thanks you all for your posts.

Rob, just so you know I didn't pull those numbers out of my ass. The answer actually came from my wife, she is an EA (enrolled agent). It's kinda like a CPA except they specialize in taxes - that's ALL she does. Most EA's will run circles around a CPA when it comes to tax questions.

There are a few variables - but the numbers I posted are accurate.