Section 179 Deduction 2020

[@NguyenCPAs]

One important think I forgot to mention is that the asset has to be used at least 50% for business! Any less than that, no sec. 179 deduction.

[@ryanshannon7703]

How do you define that percentage as business use? I mean, if you're an uber driver, I suppose it's pretty straightforward. However, what if you're a real estate investor and you use that vehicle for 'driving for dollars', meeting prospective clients (whether buyers or sellers of property), hitting up open houses, just whatever...anything having to do with that type of activity. Would it be a mileage recording of all of those trips? Seems like it would be quite tedious and open to fraudulent documentation. Also, does the vehicle have to be first owner, or can a pre-owned vehicle be used to take advantage of section 179 and the bonus deduction? Thanks!

[@KrispyR]

@@ryanshannon7703 I am also curious

[@TedlinksChannel]

@@ryanshannon7703 I would think a Realtor would easily be able to say over 50% was used for business for the reasons you stated. It would require an audit for that to be scrutinized, and you'd just want to tally and document your work-use each week or month to not forget the days and approx. miles you used it for work.

[@StreamlineCarry]

50 percent is the threshold for qualifying for 179, but you can only depreciate the fraction of the car that is used for business. If you only used the car 50% for business then you can only depreciate 50 percent of the car's value.

[@jeffjarinmd]

How do you prove that you used it for over 50% for business? Do you have to have some kind of documentation?

[@Yofavv_lightskin]

Straight to the point no extra talking, staying on top, great information!

[@lorenzomorganjr.6585]

Great video! Here's why: not everyone explains the book value scenario of "resaling" a vehicle (a couple years later) that has been deducted 100% using the Section 179 Deduction.

[@Mach.1]

Great video. Finally a simple summarization of this tax law.

[@NguyenCPAs]

Glad it was helpful!

[@mac102984]

So if I purchased a truck for my detailing business in 7/2021 can I do this this upcoming tax year?

[@tomgransinger2018]

Can you take the mileage deduction the following year?

[@jacobdwilson708]

So I make my monthly payments but what happens or how does it work with what I’ve paid for the year on payments. Does that account towards taxes?

[@jungleviper]

How do you prove the vehicle is for business and not buying it as a personal vehicle.

[@chriss2352]

Nice video. Can I put the vehicle into service at the end of December, drive one business trip, park it for the rest of the year, thus creating 100% business use for 2020?

[@2gallup260]

I also would like to know the answer to this

[@zackagil]

I’m not a tax pro but I believe the answer is YES. So long as you use in the year you purchased it.

[@Coronado-nz7wu]

Yes

[@bh12485]

Since vehicles are usually at the best price in Nov/Dec this is what anyone trying to buy an asset would want to do for their business…why overpay

[@reneepulliam8423]

No

[@trungle9923]

Thanks for the info, been looking for a new vehicle for my small business. 2022 Volvo S90 Polestar here i come.

[@mikec8432]

Concise and well articulated. Thanks for educating us!

[@joemuench754]

Great video. Would hope to see a little bit more of the math to show how much the car "actually" ends up costing in that year in order to decide if it is a good financial decision to reach for a larger, more expensive car or not.

[@JasonRamosNJ]

Yes I agree. I am very confused. If I wanted to do this in real life I go online Order a Model X say 179 and they take 25K off? Then when I do my taxes I get a check somehow for the rest?!? It sounds like something is missing.

[@cerberusb4768]

@@JasonRamosNJ You deduct 100% of the vehicle price from your expenses (as long as the vehicleis over 6,000 lbs). So, for example, if your business made $500,000 and your expenses were $200,000, you pay taxes to the government on $300,000 profit (which is appr. 33% of $300,000 = $100,000), your net profit after taxes would be $200,000 for that year. Now, if we use the same example, but you purchase a vehicle for $100,000, your expenses for that year will be $300,000 instead of $200,000, so you pay taxes on $200,000 instead of $300,000 ($200,000 x 33% = $66,000). So that way you save appr. $34,000 in tax payments. Again, those are just approximate numbers.

[@cameroncgp7071]

Great video, is there a book or source material that has the tax code accessible that you would recommend?

[@kevinalexander2725]

Great video 🙏🏾.. how long do you keep the car for to avoid tax recoup .. 7, 8 years?

[@TristanMejia]

Great video, thanks so much for sharing! I have a few questions. 1) If I plan to use the car for ride sharing (Uber and/or Lyft), does that count as "for business"? 2) For the at least 50% for business requirement, is that for the lifetime of ownership or does that phase out at some point? (say after X amount of years)

[@Loadin1323]

50% for the year of purchase. so if i buy a car in 2020, at least 50% of its use in 2020 must be for “business”. after u receive ur tax deduction for 2020, there is no minimum business usage because the whole point of section 179 is to help businesses deal with deappreciation.

[@funnellsites1557]

Can you elect section 179 year one of a vehicle purchased for business use and then in year 2 plus every year thereafter take the mileage deduction as an ordinary business expense? This would be for a Turo type of business

[@letdmichael]

at the end, you said if we decided to sell the car in the later year, we would be hit with a large tax bill. how can that be when the car is depreciating every year there after?

[@ilianafernandez1935]

How do you reflect this in the 2020 P&L?

[@MakingFitnessEasy]

How does it change your write off amount for a vehicle 6k lbs+ if you take out an auto loan to finance it (not a lease)?

[@concettamorabito5243]

So if I have a Toyota Corolla (weighs under 3k) can I still do the gradual depreciation deduction? (used over 50% for business)

[@ryanstark4333]

If a vehicle is under 6k pounds, but you order it and have some parts replaced at the manufacturer like say, a plastic bumper with a steel bumper, front and back, then it passed the 6k pound mark, would that still qualify? They are regular options offered by the manufacturer but not sure how it works

[@ESCAPETHEMATRIX]

Is it only greater than ? Or is is equal to and greater then? I’m talking about a Toyota Highlander hybrid which GVWR is 6000 pounds

[@marcoscruz8613]

Which section allows you to write off the maintenance for the cars and gas

[@gustavojuarez9649]

What exactly does it mean when the vehicle is written off? does it get paid for 100%? Or what happens?

[@timd4984]

If you lease the car, are the lease payments deductible or is the value of the vehicle deductible?

[@rafaelleon3431]

What if I want to buy a truck for my business every year?? Got several employees.. can I use the same method every year?

[@JJJosh949]

What if you don’t sell the vehicle post 179/deprecation but trade it in for a newer vehicle in 3-5 years? Is this considered a sale?

[@Good_Things_To_Know]

Does the needs to be new?

[@pdjames3042]

Is there something like this business coaching or management training? Like if I were going to hire a coach for a year and we had a contract. Is there guidelines for taking a dedeuction this year in that case?

[@ggstatertots]

What if you run a small residential care home for the elderly with a maximum of 6 residents and I want to buy a normal passenger vehicle over 6000 pounds? Would the $25,000 cap still apply since not all of the residents would need to leave at the same time, and it would also be used for things like getting groceries and supplies?

[@yuriyrybalko8535]

Hi, Nquyen. Is it possible to add any depreciation to car that I bought and sold at the same year when I put it into the service? Which way is better to go? one way is to deduct all purchase price with license/taxes taxes plus depreciation or another one just calculatee the difference between purchase- selling price? Please, advice.

[@robinlee232]

I like how simple & clear your explanation sounds. Thanks! I'm teaching (so, W2!) but I wanna do uber & Lyft again (side hustle, as they say) & I'm looking at optimizing the write-offs. What else should I be looking at? Thanks ahead...

[@jesussandoval4318]

I see that you mentioned the tax savings for the IRS. Can you touch a little bit about how you would still be liable for state taxes in California on that income of 75,000 in your example of a vehicle purchase.

[@Bk2.Kantrell]

does your business have to make a certain amount to be able to write off certain vehicles

[@kevinlieng]

What happens if I buy a car and do 179 plus bonus deduction and then in a year or 2 I sell my business, what happens?

[@keyshianorman6]

Great information just started small business . Question 🙋🏾‍♀️ so with a small business loan my question is what cars can I write off like Mercedes G wagon or jeep renegade that II’ll use it for business ??

[@yopappy891]

Thank you, very good explanation. Better than my CPA attempts.

[@im1shortviet]

I’m getting mixed dates saying that the section 179 and bonus depreciation is ending in the end of 2021 or end of 2022. Can you explain which date it is?

[@adricontreras1]

I appreciate the video, but if I could offer a small critique nix the music, it was a bit too loud and distracting. Thanks.

[@gusk23]

I loved the music. It was fine. If you did not like it, watch a different video. He was here to offer information, not give you a massage and soothe your day. People like you are the problem with our overly sensitive world. Are you the type to ask for a manager at McDonalds? FOR SURE hahahaha. Jesus!

[@evan5262]

@@gusk23 28 people agree with him, and your the only one not too. Looks like your the outlier buddy. He didn’t say anything negative, just a suggestion to improve his videos.

[@gusk23]

@@evan5262 LOL and over 500 liked it as it is. Enjoy the message and move on. The world these days is critical of too much. I love his loud music. He can make his videos however he likes. Who told you that it NEEDS improving? YOU? Who says loud music is not the right way? YOU? Over 500 love it as is. YOU are the minority. Yet you seem to think he owes you something lol. You are FOR SURE a Democrat. Weak, opinionated, and think your "feedback" is valuable when in reality not a single person cares you exist. Find someone who has "the music volume" to your liking because a vast majority love it.

[@mjohnston8313]

Music is annoying.

[@brittanyjohnson2286]

I totally agree, this guy seems very knowledgeable so I wanted to stay and listen but I was really distracted by the music.

[@wony69]

Is it true that if you are trading in a car, you don't get hit with a tax for the car you are trading in?

[@sadsackx2757]

Great video! What if I bought the vehicle last year and didn’t use 179. With the example you used in your video. How much would I be able to write off? Also can I do this for leases and financed vehicles?

[@chi8319]

Thx for rhe excellent explan! I have a Q. What happens in the 2scenarios below :1. Lease paym If you prepay the lease 2. You put a large downpf/the car w/mtly paymts. How much can you deduct in the year of purchase and placed in service

[@papiyahore7415]

Hi, thanks a lot for the video. If an individual who is sole proprietor sells a business asset in which he took both section 179 and bonus deduction would require to recapture the gain at ordinary rate (the individual'r tax rate) if that asset is sold at a gain in future?

[@gabrielamendez2352]

Hi Nguyen, can you deduct sections 179 agains ordinary income. If someone has a loss on schedule C. But, they purchase a truck under their business and already has a loss they cannot take it agains their W-2 taxable income correct?

[@angelicacruz86]

So how does the de uti on work and 100% that means the car it potentially paid off right? Do you get that money back?

[@enriquerivera6879]

Thanks for the info. I really appreciate it. So it I were to buy an electric truck that costs 89k. I would get all that money back when I file my taxes? Sorry if it’s an ignorant question, I don’t know too much about tax code.

[@julianharris1636]

how does this code work if your company makes no money the first year?

[@smartcoding5696]

hi is this for Australia?

[@erinbsullivan444]

What about the costs of building an office for a self employed business in the basement of a private home? Can I use the 179 deduction or the bonus depreciation it?

[@furiousproductions3862]

Great video! I have one question however, I have a few bitcoins that im thinking of selling. Could I use my short term capital gains profit to buy an suv and write if off completely under Section 179? I have a small carpentry business at the moment.

[@jamesm6915]

Do you have to put the car under your business LLC or buy under business owner you name

[@ernestocariagajr.746]

Does this still apply for 2021? if you have a rv rental class c, does it qualify as business equipment? Thank you.

[@djsano23]

Just came across your vid it was very helpful...just had a question what if the vehicle is under the 6,000 lbs? Would the business owner be eligible for the 18k deduction?

[@cerberusb4768]

I believe you can only deduct 50% of vehicle's price if its under 6,000 lbs.

[@scottcureton6055]

Wondering about removing from inventory and placing into service? Say you sell computers or cars and you had some in inventory from previous year/s , then place it into service in current year? Is that considered "purchased" ? Also, can I sell the business an asset(backhoe) to be used in business and be 179ed ? Thanks

[@andrew_trucker]

How do I look up the depreciation on 179 from last years tax

[@jorgebarrientos9097]

Good video do you think it would work for a food truck

[@mauriciovaglieri]

Great Video Nguyen. Thanks a lot for taking time out of your day to educate us. I got a question for you, let’s say my business has 50k of income on a calendar year and I want to buy a car for 90k and use 40k of personal assets to pay cash for the vehicle. How this scenario would play out? Would the book Value be 40k or I would still have the book value at 0$?

[@lfpein7]

Thanks so much! Answered all my questions. Your videos are great.

[@NguyenCPAs]

Thank you for the feedback!

[@Boston33celtics]

I bought a Ford Transit 350 Cargo Van and I am getting conflicting information regarding the weight being “gross vehicle weight” and “gross vehicle weight rating” Ford sent me a screenshot showing “gross vehicle weight” of 9500 but it also shows on my door sticker “gvwr” 9500 so I’m just confused how much the car actually weighs so I can write off the full cost rather than partial. Any thoughts ?

[@cintiafernandescoleman7508]

Thank you so much for the video! If the small business owner uses Section 179 to purchase a qualifying SUV and plans on keeping the SUV for 5-7 years. What happens when you sell the SUV after such time/ the SUV's useful life?

[@brandonhuggins1949]

I'm only 19 so I am probably wrong. But I would assume you pay capital gains tax on whatever the sell price was. Not sure if long term capital gains tax applies to this as it does with stocks...

[@DaveBezeaugolf]

Say I buy a $50k qualifying vehicle and take the full 100% deduction in 2021. Then I sell it in 2022 for $40k so the $40k is added to my 2022 income. But then in 2022 I also buy another qualifying vehicle for $40k. Can I use the section 179 again to fully write off that $40k replacement vehicle I purchased and offset the $40k added income from selling the first one?

[@caseytheconqueror7958]

Could I do Bonus for half the value and then S/L for the remainder of the assets life as well?

[@dtuliao]

Great video: Have a couple of follow up questions: #1 Does your net income have to be equal or more than the purchase price of the car? For example, if I make $50k net income from my business, can I use these depreciation techniques to fully deduct a $130k+ Mercedes G Wagon? #2 Would I have to pay off the vehicle up front or can I finance?

[@algarrido2078]

Following

[@gregorybills1084]

What would happen if you take section 179 and bonus depreciation and say you wrecked that vehicle in year three. I'm assuming they would recapture some of those savings. Of course you would be purchasing another vehicle. Would the new vehicle under whatever the current 179 rules were cancel out the recapture owed

[@gregsouris1722]

That was a great explanation Good job Greg

[@honmingwong5759]

I will watch all your videos

[@timd4984]

8:28.. if the car is under 6,000 pounds, can't you deduct $18,500 and take bonus depreciation for the rest? Didn't the Job Act make this change? 100% for 2022 and 80% for 2023 etc?

[@eunjuseo8502]

i can not hear what you said about the depreciation when skipping the first year. also, can you explain about the disposing of the asset like vehicle. thank you

[@thekeshelkompany323]

HUH, what do you mean by "normal" depreciation?? I purchase it at the end of 2018 Dec and put into use the next year. Does this mean I skip the 179 depreciation?

[@danielstimpson4365]

You stated “ more than 6000 pounds” for vehicles. What if it’s exactly 6000 pounds. Does it qualify?

[@briandelgado305]

So you basically get payed back for your car if over 6000. But if you sell it you have to pay it back?

[@richielim7203]

Do you have to pay in full on the purchases. Like a car what happens when you finance can you still use the deduction.

[@erinbsullivan444]

It includes financed assets.

[@CosmicCosmo1]

You can finance the vehicle and take the whole write off in year 1. So it is a good way to reduce your tax liability without actually spending your cash

[@houstonpuppiez]

How much money would the small businesses need to be making per year

[@Dipper964]

Does bonus depreciation and section 179 have to be on the first year of a new business? Or the first year of a new purchase? If that’s the case, can you use it every year?

[@jesuscervantes5353]

Same year of purchase

[@CosmicCosmo1]

You can use them both every year.

[@Dipper964]

@@CosmicCosmo1 thanks

[@hasaanen2194]

When you choose to depreciate it slowly. Do you follow market value or is it up to you?

[@marionakuci2542]

Do they have to be new cars? Could you buy something used and still do the write off ?

[@tylerboehringer8311]

yes you can

[@ChuongNguyen-up9fy]

what's the name of the song at the end of the video? haha THanks for the info bro

[@OmarRamirez-jm8rg]

Can you provide a list of the vehicles that qualify for the 179 deduction? Where can I find an updated list?

[@2gallup260]

Google

[@ferdiecanlas1722]

Hi, are you located in LA area?

[@NguyenCPAs]

We are in Denver

[@chintan01]

Great video. Can you lease purchase a vehicle and still take the sec 179 deduction for the first year?

[@brendonmonson4053]

I use a Honda fit for my IT business and I removed the backseat to place tools there. This vehicle only weighs 3k pounds however it is used for my business about 90% of the time. Can I buy a newer version of this car and write it off 100%? Great video thank you!

[@NguyenCPAs]

You will likely be able to write off a maximum of 90% since you use it 90% for business.

[@holynaboo]

So what if I earn under $5,000 in my business this past year. And buy a 35,000 car that year. Do I get a $30,000 credit?

[@holynaboo]

@@cisnerosmike thank you! That makes more sense

[@nobody2u834]

So if you keep the car for longer than 5 yrs you don't have to worry about when you sell it the amount you sell it for being income??

[@NguyenCPAs]

You do still have to worry about it. It's just that after 5 years, the regular deprecation and the section 179 depreciation will have the same net effect.

[@kkiiization]

Hi so a Tesla model 3 used for business purposes would not qualify for this deduction I assume?

[@brokatron]

@@shiftnsix the model x qualifies

[@kerolverdi2660]

I appreciate that rule, thanks a lot

[@digitaldynasty9618]

EXCELLENT info

[@dannynim414]

Great video. I am a landlord which used to owned 6000lbs Landcruiser but I gifted to my son early this year. By taken section 179, can I have my son sell it back to me at market price $25000 thus I can write it off the taxable rental income? Please advise. Thank you much.

[@JasonRamosNJ]

You buy the car lets say Model X. Zero down. Do you get 25K towards the purchase or do you have to make a year of 1500 a mo payments then tax time get 25K and how do you "depreciate" the rest of the car who pays it? Does govt give you a check at year end to give to Tesla?

[@kushpatel5238]

Do you have to own one or two business?

[@eunjuseo8502]

also please explain about section 169. thanks

[@dilyaknight5430]

What happens if (before factoring in the vehicle) you only owe $7,000 in taxes at the end of the year? Should you depreciate the entire amount of a $50,000 car or just $7,000 of it to make your tax liability for that year ZERO?

[@Drogos79]

I think you are wrong on the 6k LBS rule. You can deduct regular passanger vehicle but it has to be used for business at min. 50% and you are caped at 11,500 if I remember correctly

[@RobertMiller-ei2ql]

Do I get a $25,000 check or a $25,000 tax credit

[@pugasnkr]

Tax credit

[@mountaintopper]

If I used section 179 this year (for a $25,000 deduction of $43,000 Toyota Tundra short bed,) and sell my business next year, and plan to keep said vehicle after the sale, do I have to pay the section 179 deduction back?

[@CosmicCosmo1]

If the vehicle is on the balance sheet of your company and you sell your business then the purchaser will obtain the rights to your vehcile. If you want to maintain the vehicle you'll need to purchase it from your business and transfer ownership to yourself. The business will pay capital gains on the sale of the vehicle to you. Hire a CPA to prepare your taxes so that this calculation will comply with accounting standards

[@dangraves25]

Do you have to buy the vehicle fully in cash? Or can you have a loan?

[@NguyenCPAs]

Financed is fine.

[@dangraves25]

@@NguyenCPAs In the years after that can I do the standard mileage deduction, or once I do the 179 that's the only time I can write off anything with that vehicle

[@matveytoderyan4597]

Can I give the car away to a family member?

[@antoniofba667]

Nice choice in music

[@vramananx]

Thanks for explaining in detail Can you give an example for deduction for vehicles weighing less than 6000 lbs Using minimum depreciation

[@jacobdwilson708]

I think cars and lite trucks are $11,610.00

[@KeenanRogers1]

Great video! So if Im a musician and I buy a guitar for 2500 dollars, as long as I'm using it in the year 2020 then I can write it off 100% on my 2020 taxes? and that basically means I get 2500 taken off what I'd be taxed on correct? sorry I'm new to all this and just found out about Section 179!

[@NguyenCPAs]

Yes, it would reduce your taxable income by $2500

[@Loccedingamingovw]

700th like here. Grinding my way to the millionaire club