Disadvantages of Writing Off Your Car in 2024 - Section 179

[@fwhit]

This is amazing. I couldn't agree more, the accounting youtube personalities NEVER talk about the downsides of 179/bonus depreciation, they just tell you to buy a car and take the deduction.

[@jordanh4127]

Love this channel! After my wife being a 1099 contractor. We officially registered her business this year! LLC (s-corp). Learning more and more about tax from this channel

[@reachyouteachyou4649]

Nevis llc your welcome

[@zerocal76]

I've watched several videos on this and yours is easily the best one. You don't just regurgitate general info. Thank you sir!

[@IvyLeBron-ob3kz]

This was very helpful indeed, lots of clients asking for 100% write off and sending me videos and driving me nuts; this is the greatest video so far that I'm sending them in response to clear all their "too good to be true" thoughts. Thank you!! Don't stop!!

[@sonneao]

Great video. I liked how you present examples of this vs that, side by side, plus explaining actually what is it for. A lot of people rave about deductions, when sometimes they might not be as effective.

[@dtuliao]

Finally got a straight answer. I guess buying a car for my "online" business isn't necessary. Thanks for saving me future headaches.

[@dailyrant4068]

It can be, If say you were shipping Amazon/eBay products and have to drop off. But you better have a log that shows and proves it.

[@13merritt1]

Great job with the information. I really appreciate you presenting the cons. Many people see this as an easy deduction, but they don't realize the corner they paint themselves into.

[@dwaynelattimore819]

Love the professionalism good brother. This information was well put together.

[@WardDallas]

I learned the hard way. Had a business truck 50/50 personal. Ended up having to sell and paid capital gains tax. So basically all the savings up front were paid right back.

[@kuntakentay6969]

I mean that’s not entirely too bad. It’s not like you lost money. You just saved money when maybe you didn’t have it to pay a boat load of taxes, but once you sold the vehicle you had the money to pay whatever capital gains tax you had, which would probably be a lower cost in the long run depending on how much you sold the truck for later.

[@Felale]

You made a gain on the vehicle and you're complaining? You also got an interest free loan.

[@thedavevidal]

Another bomb of knowledge from these accounting wizards

[@SriSrinivasable]

THE BEST Video EVER. Very True facts. I tried to explain this to a nosy guy who got involved in my buddy's & my conversation. He thought if he sets up a LLC he can write off a car and get it for FREE (?????) without making any money (cause the internet strangers told him so). He got upset on me, when i told him, U HAVE to make enough money and the TAX value is the value of that car (and also it has to be used atleast 50-60+ % for the business).

[@4everyoung16]

I have a question! How would the IRS knows how much you use your car?

[@cwbywy9544]

​@@4everyoung16because you have to keep mileage records of business and personal use for every single trip. Or at least total mileage records with all business trips so you can show the math.

[@mtigress4589]

Mmm. My two favorite words. Ordinary and necessary.

[@Bellav122]

Amazing, #1 top gum explanation for code 179 …

[@JWard2]

I needed to learn this. Thank you

[@LYFEAccounting]

Glad it helped!

[@lynnchandler5845]

Great video! This is valuable information that, as you said, others don’t bring out. The title is fair because is is a counterbalance to all the other videos that tell you how and why you should write it off. This highlights important reasons why it could be detrimental to your bottom line such as the danger of 179 deduction and selling the vehicle.

[@tmac4jesus]

Finally someone to share real world consequences for trying to live in a dream.

[@jamescarter2013]

This Guy is Heaven Sent 💯

[@madjack730]

You just dropped a huge gem.

[@LYFEAccounting]

The information is needed for sure. Thanks for watching.

[@terminalreset7659]

Any vehicle can become a 100% business deduction, just by wrapping it with the contact info and logo for your business, correct? I have done this, and also taken advantage of Section 179 for over 20 years. The 6000 lb qualification is for regular cars, (ie G-Wagon, Suburbans, etc). There is another class for 15k lb and up commercial vehicles. I've never had an issue with 179, and I was audited twice. Both times, it wasn't the vehicles that triggered the audit. It was my 'independent contractor' status as a consultant working for headhunter. They paid me on 1099, but told IRS I was W-2. Once I sent my original contract to the IRS, it was resolved. I was indeed an independent contractor. BTW, your channel is absolutely the best of its kind. Period. I recommend you all the time! Thank you for the great info!

[@mtigress4589]

Actually that is incorrect. Putting g a logo on a vehicle doesn't change it's deduction percentage. If you're still driving it 50% for personal use, the logo doesnt change the 50% business deduction to 100%

[@jbarres80]

@@mtigress4589 serious question if you have your truck wrapped and your driving is your truck not being used as advertising which can lead to business ?

[@mtigress4589]

@@jbarres80 It is a one time advertisement expense for the cost of the wrap. It does not change the nature of the usage. If you're still driving around.picking up your kids and getting your kids 50 percent of the time wrap or no wrap, the business use is only 50%.

[@dailyrant4068]

Exactly. You simply cannot drive a business vehicle for a personal trip regardless of what you are driving. However in practice I don’t see why IRS would question you if you have say a cargo van that has no seats. Where it’s glaringly obvious is when you drive a minivan with 3 car seats in the back and pretend that you aren’t picking up kids

[@mtigress4589]

@@dailyrant4068 if you have a cargo van and no other vehicles you'd still questioned about personal use.

[@Joshuatree7746]

That was great! Its nice to know that my accountant was correct.

[@Driving4bangers]

I like the way you teach. Subbed

[@livinginsoutheasttexas]

If you use the straight line 5 year depreciation method there is no recapture.

[@jerzyfam]

Great video! You have a new subscriber my brother.

[@jjna8844]

I love your content. Very informative

[@cregxy]

So if you have a job making 200k a year and a tax obligation of 40k a year it would make sense to use 179 to start a transportation business

[@Inakamo]

No you cannot

[@salpremiers]

This is a great video!!! I learned a lot today. Thank you for this kind of excellent quality video.

[@Espinal_424]

Damn 6.9k views and only under 600 likes… smh hit that like button y’all

[@MarlonFonrose]

To reason #3 there is a different schedule or time period for recapture tax. I believe vehicles is a 5 year period so it isn't ideally a death sentence if you write it off 100% with bonus depreciation but keep it for 5 years.

[@rafaelbronzeado4896]

the best explanation i ever seen, thank you

[@spiritakarabbit369]

Dude, you're awesome. Thank you for sharing these insights.

[@Michael-jp3qe]

Wonderful educational video. I am considering purchasing a vehicle using my business.

[@really6965]

GEMS!! I honestly was wondering about that.

[@MALLARDHOTSHOTS]

Great video thanks for the information

[@tonymouannes]

The worst part is when someone buys a more expensive vehicle for a better 1st year right-off, which ends up costing them because the vehicle is more expensive.

[@jordankendall86]

I have this hypothetical scenario: In 2024, I buy a used Black Chevrolet Suburban for $32k to qualify for Lyft Black SUV service, I drive it in 2024 for Lyft grossing at least $45k (doing it part-time), gas expense is $7,000, car insurance is $1,800 (guessing here), and assuming no other expenses, wouldn't I be able to take the full $30,500 section 179 deduction in 2024? Let me know what I am missing. Thanks.

[@Atl404sFinest]

So in conclusion, don’t buy or lease a vehicle in your business name unless you’re ready to be subject to audit

[@danielosagieimahiyerobo8260]

Let’s say I own a LLC as a disregarded tax entity, but I also get a standard salary from my primary job. If I have enough write offs to bring my LLC’s taxable income to below 0 will the excess write offs flow through to reduce the taxable income from my job?

[@jamescrenshaw5097]

Very well done video

[@LYFEAccounting]

Glad you enjoyed it

[@drcv124]

Great video

[@felipedaza2415]

But how does the IRS know if you used your car for biz 50% of the time vs personal use

[@jimtrue1465]

Keep in mind the IRS requires a business to deduct all legitimate expenses, including vehicle expenses and depreciation. If you fail to write off all expenses and as a result you increase your earned income credit, you could be in very deep trouble.

[@ms.marynailz748]

How would they know if you haven't reported all expenses? Just curious

[@jimtrue1465]

@@ms.marynailz748 Obviously, without a full audit, they wouldn't. But keep in mind that the IRS has decades of statistics for all types of businesses, so anything too far out of the norm would be a red flag.

[@Luxurypressurewashing]

This channel the 1 forealll

[@MrJtquest]

Thank you for what you do. I used a Truck for 100% Business. The truck is in my name, not under the business name. I understand Actual vs. mileage. Can I claim the Depreciation over 5 years even if the Truck is NOT under the LLC name? PLUS, the actual or mileage, whichever one benefits me the most?

[@darkairussachihiro5814]

Great information!

[@OswaldoCaballero-gt6io]

So basically, what he is saying is if you are for example wanting to write off a $40,000 vehicle for your business, make sure your income for the business is above $40,000 for it to actually be beneficial?

[@madjack730]

I’m going to check out that second video.

[@thriftingsisters1226]

With the new push for EV's, Im sure the cars will become lighter in weight. Could effect the deduction. Also, I prefer "leasing" vehicle in company name, so all is a business expense, all repairs covered under warranty as you wont keep it more than 3 years and if ever having assets attached by courts, vehicle is not yours. Sometimes "renting" better than owning.

[@LYFEAccounting]

Great points. Currently, electric cars weigh about 1k pounds heavier than similar gas vehicles because of the weight of the batteries 😉

[@bdm8960]

EV’s are actually heavier

[@garyCauser]

Special tax credits for EV

[@DanielAguiardeMelo]

Good video! But quick feedback: ask reads: A-S-K… not A-K-S…

[@Texas_Made_]

LMFAOOO @ when he mentioned the yacht💀💀🤣🤣🤣

[@phatpatatit]

Nice video presentation. I like that You get right to the key points and relay the info well👍

[@jennyunterseh5724]

This is a great video

[@hyp36rmax]

thank you!

[@briandeluca6908]

But they do not know how much you use it for the business Therefore they can not say you didnt use it full time

[@danielcorsino]

I’d still write it off, because you can continue those losses over until they’re used in other years when you do make money.

[@Ron90ald]

Thanks

[@MrCovert23]

How the hell would the IRS even know if you are or are not using it at least 50% of the time ?

[@happyeggroll5267]

THANK YOU -- I've been waiting for the downsides. I'm getting a 6k and was looking at older-new/used but was thinking i should get New for depreciation. Now lets say i profit 200k over 5 years, would it be responsible to get a $60k vehicle [cargo] and write off say 20% over the 5 years? With no plans to sell it. Used for biz 90% of the time

[@BD-kx8ox]

Can I write off a vehicle that I'd purchase in my personal name since business is new and didn't have enough business credit or income at the time but solely use it for business?

[@Mr.Bryan1234]

Nope you cannot put it under name you have to put it under business LLC - corps and never pay cash finance it make minimum payment.

[@elvisnero370]

​​@@Mr.Bryan1234 I'm very confused, I bought a f450 and paid a big down payment out of my pocket because my business has not enough money on it, my cpa told me I can't put it as a deductible except for only the interest I'm paying to the dealer 😢

[@kingzworld4045]

I purchased a 6000lbs truck 3 months before I was fired from doordash, would I be able to get any kind of benefits from 179 tax break , the vehicle was used over 50% of the time

[@ItsreaIgaz]

The model x doesn’t weigh over 6000lbs

[@gashaw278]

thanks a lot

[@sams6855]

does depreciation capture also accrue after the 5 year depreciation ? and if yes what to do with the car not to have that expense

[@gsd.hondoYT]

I owed almost 150k in taxes last year. Never Again! I am adding a vehicle to our fleet this year. Should we purchase the vehicle straight out or finance it? Does it matter for section 179?

[@Ms2Chill]

Just in the first 3 minutes, I can say that the -$15000 net loss can be transferrd to your K1 and then personal to reduce your own taxes.

[@adriansgarage774]

Clickbait: should retitle to, WHEN to and WHEN not to Write off your vehicle…

[@barryalesiaackerman1433]

Same shit

[@HowtoRestoreHeadlights]

seems like his title got you here as it sits now? 😊

[@hersheywalker6447]

We get axed 😂😂😂

[@happyeggroll5267]

He articulated exactly what the title says.

[@adriansgarage774]

@@happyeggroll5267 my comment is from a year ago. So he changed the title. However, thumbnail still says. “NEVER write off your vehicle”

[@gregbuc9825]

Is it accurate that if you choose section 179 for a business auto tax deduction in your first year you cannot go back to the standard mileage deduction? And if so, would you recommend perhaps taking the standard mileage deduction in year 1 so that if needed you could go back to using that method if beneficial?

[@matthewbarnard461]

Had to sub! Good content that applies to myself, looking to get a business vehicle for my startup.

[@zdelacruz6296]

quick "hypothetical" question this may sound stupid. Let's say I have a salaried position making 120K per year subject to normal federal/state tax....then I did Uber Eats, and write off the depreciation of a recently purchased car, as well as the operating cost of the vehicle...which creates a net loss on that Uber eat personal business due to the high price of the car. Can I use the net loss tax deduction from the Uber Eat personal business and apply it to the 120K job completely not "related" to the business---let's say the 120K is a teaching job or an engineering job... I'm curious since I've heard some people say they do this, and I don't believe it can be done.

[@Ivy-ne9zw]

Is section 179 only for “new vehicles” ?

[@Espinal_424]

It confuses me the whole depreciating the whole purchase price of the car. So if a car cost 70k and you write off the 70k in the first year. What exactly are you doing? And are you still making payments towards the 70k? Might sound like a dumb question I know :( but at least I’m being honest

[@marcpena3197]

Yes. You still have to make payments and when you sell the car you have to recapture the depreciation you used in year 1.

[@Espinal_424]

@@marcpena3197 thank you for the info

[@buddysteve5543]

Do you have a video specific for Uber/Lyft drivers who own their car?

[@user9675]

So let's say I write off 100% of the vehicle in the first year. You mentioned if I don't use the vehicle for 100% use for business within give years I will have to pay some back. But what about after 5 years? After five years is personal use fine without penalty?

[@bayarearob]

I do like what you're saying although I just watched the other guy and girl from this channel talking about the exact opposite 🤔

[@LYFEAccounting]

Thanks for watching both! Just two sides of the same deduction: pros and cons. Every deduction isn’t right for everybody.

[@KYLE_FROM_THE_FUTURE]

Biggest lesson people… pay for a damn tax accountant. Stop trying to “play the game” by yourself. Find a good CPA, tax attorney, and as always… be a profitable business. Life gets GOOD when you have these 3 things.

[@gayathrinagarajan868]

What about netting your business loss with your other sources

[@jjna8844]

Do you have to be a LLC or Corporation? Or can this also work for Sole Props?

[@nikkiknows1545]

This will work for sole props as well. Just have to file a sched C

[@PacoTense]

I don’t own a business and I work from home for a company in California. Is my Jeep Grand Cherokee eligible for IRS section 179? Should I write off my vehicle expenses?

[@jeanbrutus4638]

I just brought a uses 26000 in math now it's at70000 and I still have to pay for another 4 more years what do I do

[@shanetseng6040]

How do they track if the vehicle is used 50% of the time or not? Based on owner's saying?

[@pech_wake_day1153]

What if your a new start up and need that vehicle solely to operate the business?

[@LYFEAccounting]

If it is ordinary and necessary for your business, IRS should have no issues.

[@pech_wake_day1153]

@@LYFEAccounting absolutely 😎

[@Danielcontreras_92]

Can i write off a Rolex i own a hvac business and we deal with water Rolex submariner is a waterproof watch

[@PhilYoung215]

I wanna work w these guys.

[@MrCovert23]

Man we can never win

[@brucekaiwi3839]

“As an accounting firm we get axe”

[@funkyfreshEazyO]

Asked

[@mekrobar7872]

what if you use your vehicle for personal use but it has company info on the vehicle as advertising? does that mean driving anywhere is now company business if advertising for your business is necessary?

[@BrotherShakur]

Don't losses carryover to personal taxes?

[@AramHambardzumyan]

Thank you this is so great, just have a question if you use section 179 and deduct the hall price of the car and after 5 years you decide to sell, should you pay back the recapture income tax? thanks

[@BreakingElegance]

What happens if you sell your vehicle before 5 years but buy a new one that costs more then your old one ?

[@christopherestes3167]

You still have to recapture any depreciation you took on the first car when you calculate the gain on the sale. The IRS used to allow like kind exchanges with vehicles/tangible property just like you can with real property...but that went away in the 2018 tax act.

[@msrednosepit8434]

I bought a commercial vehicle last Oct. The business didn't make any money but had a ton of expenses. I plan on trading it in for pick up for business use. So basically I should not write it off?

[@peterlovincey1769]

If I write off a vehicle using 179 for my business do I have to own it for 5 years before selling it to avoid depreciation recapture?

[@jimtrue1465]

No matter how long you own the vehicle, you can't avoid depreciation recapture.

[@vt7165]

If you are an S-Corp doesn't the loss go to the owners personal tax return?

[@mgd9151]

Is there a source where I can start to learn the tax codes? I am new to this tax stuff because I would like to start a business but there is a lot of info out there and I need to know what is right and what is not.

[@kuntakentay6969]

So basically my $26k pickup truck for my welding business is a necessary purchase obviously by both me and the irs, it won’t bring me into any super negative profits if I write the entire thing off so it’s worth it there, it’s obviously over 6k lbs, and it’s used for businesses purposes 90+% of the time. From what I gather from your video, Im in the perfect situation to write off the entire vehicle???

[@SuccessRendering-hc6ht]

Assuming that you want to lower your taxable income yea. However lowering your taxable income has its associated cons.

[@kuntakentay6969]

@@SuccessRendering-hc6ht What are these cons you are referring to?

[@SuccessRendering-hc6ht]

@@kuntakentay6969 available credit. Debt to income ratio.

[@michaelmorales5594]

Should a Lyft driver write off a new car ?

[@trentdelgadillo]

How would the IRS know whether or not the vehicle is being used for the business or personal?

[@jimtrue1465]

They will mostly take your word for it. But if you use it for business, you are expected to keep some sort of mileage log so you have a record of the number of miles driven for business.

[@dailyrant4068]

They don’t until they audit you. Then like many business owners you don’t keep log because you probably don’t actually drive it 100% for biz and then have to fight the penalty

[@haoransun9690]

Can u offset w2 with this if the title is under business name

[@ralphposadas1412]

How about a W-2 employee is it good to write off vehicle expenses?

[@LYFEAccounting]

w-2 are not eligible, unfortunately.

[@SuteDevices]

0:01 accountants get axed! How do you guys survive

[@ochicoloto3524]

Thanks for the video. Can I use standard milage deduction for a car I list on Turo? I have had ixed responses from cpas because it's the renter buying gas

[@christopherestes3167]

you can never write off an expense you don't actually incur. You will depreciate the cost of the car over time as a business use asset (if it's not 100% business use then you get the corresponding business use %)... and expense your regular operating expenses of owning the car just like you normally would....but you can't deduct mileage that your renters incur...