hooleyboy

can I deduct all my car mod expenses in the past year under a "hobby deduction" of 2%. Has anyone done this? Im no tax pro but after my quick research it looked like I could get a 2% deduction on the money i've put into my car. Ive got all the receipts.
2% inst much but when you consider the cost of go fast parts for a Mercedes it can add up. anyone got any insight on this?

jangy

LOL, I'd bet no way. What line of work are you in? Anything related to cars? You would have a better return justifying the car as a business project than you would a personal hobby, if possible.

psk145

my accountant always told me hobby deductions were almost an instant red flag. I've written off some of my mods though. Since I use my car for business, and its needed some "maintenance" items over the years.

Blacksport350

Can you say "AUDIT"?!

drop997stop

why worry about a audit if there is nothing wrong.

If you spend a portion of your time at car shows, meets, and other events with your car I say yes.

hooleyboy

I've heard of people doing this.

One thing some people might want to consider is starting a performance company to fall under a tax shelter. Some form of a not for profit entity.
If you think about it, You could buy all sorts of stuff for your car at your own expense, then come to mbworld and share your reviews on what you just did. So basicly become a not for profit company who writes reviews (here at MBworld) for a select section of the automotive performance industry.

I've mulled this idea over for some time and I think I'm going to form some sort of non-profit LLC then continue to conduct myself on this forum the same why I do... Posting about headers i installed. Sharing dyno charts after mods, Attend event, or host events, Like I did on December 14th track meet.

You could in turn get a new set of tires on your own dime, write a review on them and get a tax brake deduction at the end of the year. I plan on dumping alot of money into my car this year and sharing all the info with you guys. Why not get a tax deduction at the same time?

I might be way off but it sounds do-able.

Blacksport350

Because defending even a simple audit is a total PITA and time consuming. So putting up markers that are likely to flag you for ran audit is not my idea of a good idea.

This assumes the finances of a typical E55 owner. If you have a simple financial picture, go for it.

It would still be easier to claim business use of the car and pass some of the mods off as repair/service expenses which will not raise the same red flags.

Hobby deductions are a very hard sell unless you structure a business around your hobby to take the loss and keep in mind that your business will need to turn a profit at some point.

Good luck and go find yourself a good tax accountant as they will need to sign off on your return and structure things for you.

komp55

Never forget:

Your tax return is your first offer.