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.

[@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!!

[@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!

[@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.

[@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

[@dwaynelattimore819]

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

[@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.

[@phatpatatit]

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

[@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.

[@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.

[@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.

[@MoonPump]

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

[@nyakeharuna3273]

Wow I Felt like I overlearned before he even Introduced himself!! 😂😂🤠 Great Work !

[@LYFEAccounting]

Lol Thanks!!

[@Catvr122]

Amazing, #1 top gum explanation for code 179 …

[@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?

[@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?

[@Taylor-Hanson]

This was very informative. Thank you!

[@mtigress4589]

Mmm. My two favorite words. Ordinary and necessary.

[@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.

[@JWard2]

I needed to learn this. Thank you

[@LYFEAccounting]

Glad it helped!

[@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.

[@jamescarter2013]

This Guy is Heaven Sent 💯

[@jjna8844]

I love your content. Very informative

[@jerzyfam]

Great video! You have a new subscriber my brother.

[@Michael-jp3qe]

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

[@salpremiers]

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

[@Driving4bangers]

I like the way you teach. Subbed

[@MALLARDHOTSHOTS]

Great video thanks for the information

[@nightdonutstudio]

How do IRS know or find out how much time you use your vehicle for personal or business time?

[@tmac4jesus]

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

[@rafaelbronzeado4896]

the best explanation i ever seen, thank you

[@jamescrenshaw5097]

Very well done video

[@LYFEAccounting]

Glad you enjoyed it

[@spiritakarabbit369]

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

[@madjack730]

You just dropped a huge gem.

[@LYFEAccounting]

The information is needed for sure. Thanks for watching.

[@drcv124]

Great video

[@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.

[@livinginsoutheasttexas]

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

[@really6965]

GEMS!! I honestly was wondering about that.

[@Espinal_424]

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

[@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.

[@Atl404sFinest]

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

[@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

[@felipedaza2415]

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

[@Luxurypressurewashing]

This channel the 1 forealll

[@danielworkman558]

What is the time window for the recapture? 5 years?

[@mkviz]

When I read section 179. I was wondering how the heck and why are people doing this. At the end of the day it’s still a deduction. You are still making payments on the car. Your business would have to still make money in order to write that deduction off. Your video pretty much explains it. The deduction only reduces your taxable income. Which you still have to make money on the business.

[@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?

[@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 😢

[@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

[@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.

[@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?

[@darkairussachihiro5814]

Great information!

[@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.

[@RuharnaYT]

What if in the same case that you explained I have Single member LLC running in loss. Isnt that tax deductions flow toward my personnel taxes of my W2 (with my different job)

[@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?

[@DJCoolKevTheTotalPackage]

Great info!!! Ordinary & Necessary...

[@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

[@madjack730]

I’m going to check out that second video.

[@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

[@jennyunterseh5724]

This is a great video

[@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?

[@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?

[@buddysteve5543]

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

[@modifiedjaymill]

Great information My only complaint is talking with your hands the entire video lol

[@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

[@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?

[@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

[@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

[@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?

[@hyp36rmax]

thank you!

[@matthewbarnard461]

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

[@Texas_Made_]

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

[@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

[@Livin_the_Dream_77]

Can you apply Section 179 Expense against W2 Income? This is for a new business and filing joint.

[@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 😎

[@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.

[@Ron90ald]

Thanks

[@gashaw278]

thanks a lot

[@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

[@ItsreaIgaz]

The model x doesn’t weigh over 6000lbs

[@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.

[@ralphposadas1412]

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

[@LYFEAccounting]

w-2 are not eligible, unfortunately.

[@BrotherShakur]

Don't losses carryover to personal taxes?

[@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...

[@gayathrinagarajan868]

What about netting your business loss with your other sources

[@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.

[@bryansimpson9858]

How does the IRS determine that you are not using your car for business enough?

[@lorinal7691]

Great question

[@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

[@Ivy-ne9zw]

Is section 179 only for “new vehicles” ?

[@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

[@vt7165]

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

[@MoonPump]

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.

[@MoonPump]

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

[@SuccessRendering-hc6ht]

@@MoonPump available credit. Debt to income ratio.

[@KarmicPatina]

What happens if when purchasing a vehicle at a dealership, they try to collect tax title license and you inform them that you are shipping the vehicle overseas, and won’t be registering the vehicle?

[@dailyrant4068]

This is where you can’t cheap out and ask KZbin. Clearly it’s a situation worth paying a CPA for. My sincere two cents

[@garrickmackiney7312]

Taxes are based of registering address not the retailers address. Most dealerships can not do out of state registration and tax remittal. You will need to contact a vehicle importer/exporter to get all the receiving countries laws and requirements on importing vehicles since they are all varied. Duty fees vary based off vehicle classifications i.e Trucks, SUVs, Cars...etc., Age of the vehicle, some countries even require certain types of glass for windshields and 2nd row doors or interior/exterior light certifications. Hope this helps you out. Just pay for the vehicle via cash AFTER your transport company tells you the required docs needed to be sent to the customs portal to ensure they'll receive the vehicle and not turn it away, give you hefty fines or gets held up at customs while charging you massive storage fees. The transport company will also have a doc or instruction guide to give to your dealer that'll tell them how to handle the titlework

[@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.

[@TremainCalandraJackson]

Section 179 covers curb weight or gross vehicle weight?

[@BorisBidjanSaberi11]

GVW

[@inflation1139]

Can you write off your whole car if you're financing it? Or do you have to pay cash for the car to do it?

[@LYFEAccounting]

You can finance it.

[@haoransun9690]

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

[@anirudh_s17]

Where can I get that jacket?

[@hnaf6279]

Good question