Does ML qualify for this? Anyone know? I thought it was for vehicles over 3 tons, just don't konw if that's curb weight or GVW.

thx

Aceman

 

It's GVWR, so the ML qulaifies on weight. But, you must be self-employed to claim this deduction.

http://www.irs.gov/businesses/small/...137022,00.html

 

Also, talk to you tax consultant before you assume it's a good thing. We did the other day and decided not to do it, but to just take mileage. The reasons:

- We get hit by Alternative Minimum Tax (AMT), so in the end, it only makes a difference on our State return which has a tax rate of 9%.
- When you sell the vehicle, the sale price is figured as ordinary income, which may more than wipe out your savings if you don't get the Federal benefit up front.

Each person's situation may be different, so check with an accountant first.

 

Greg, You do not have to be self employed but must have a use for the vehicle in the day to day business without reimbursement. A business owner can also take this depreciation however the vehicle must be purchased by the business. In most cases a lease would be more beneficial as the entire lease payment can be deducted as a business expense. In my estimation this is actually the only situation where a lease makes any sense as the vehicle is being paid for by pre tax dollars.

 

Interesting, I just had this conversation with my accountant yesterday. I am self-employeed and wanted to write off as much as possible with my new SUV. But he advise against large deduction due potential "Red Flag" by the IRS. He only advised maximum of 50% deduction if possible because of the issue with AMT(alternative minimum tax) also. I have to figure out the milage and percentage usage of the new SUV and report back to my accountant next week. I will get the full detail next week.

John

 

The rules are quite clear and concise. If you qualify for the full deduction have him run your return both ways with the full and 50% deduction and see if it triggers the AMT. If it does and the amount due is greater than the 50% method then go with the latter, if it does and the amount due is less than the other way go with the full deduction. Your accountant is conservative which is good but as so far as the red flags are concerned, unless you are pushing the rules quite a bit in other areas I would not be concerned about it. In the event of an audit letter you just need to send supporting documentation.