Why do so many people drive G-Wagons? Section 179 Tax Code Explained!

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[@humphrey]

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[@efrayimmoradi7273]

That's odd cuz not all these cars are 6000 lb. Some of them aren't even close...

[@jonathansamuel4172]

Is this a one time thing or can you do it again after a few years?

[@tomcat8662]

Cadillac Escalade is on that list. But mine is 5,600 pounds.

[@jacombodoescare]

That’s why I always see business owners with them.

[@stevengg5090]

The problem with this is that it’s only for that 1 tax year. The very next year you need to buy another g wagon. This isn’t really sustainable. But it’s great to do every time you buy a new car

[@secton832]

@@benchoflemons398 the Toyota Landcruiser is notorious for this. It falls under the same tax deduction, is a large luxury SUV, but what sets it apart is appearances. They buy the Toyota over a Lexus or Mercedes because in certain businesses (i.e. construction) appearances matter, and if your boss shows up in a $140k Mercedes to a job site, it gives the impression that they sit in an office all day and don't know what they're talking about or care about their employees. But, Toyota has a different connotation with the brand, so by buying a large Toyota with the same features, you look like more of a working person and you relate to your employees. It's all a game of appearances

[@SonicBoone56]

@@secton832 yep

[@edgardosiragusa3292]

And he don’t explain that the car need to be 100% for business purposes so you can write off the whole amount if you use only 50% of the time you can write off just the half of the cost in case you be audit by the IRS you better have something to proof that is a business car only, there’s a loophole but that’s about to change.

[@Malfavon02]

Buying an expensive vehicle just to get a tax write off is NOT necessarily a good financial practice. The end benefit to the tax deduction is still way less than the overall liability of buying the vehicle. More so when you are financing and paying finance charges.

[@dehanbadenhorst1398]

Cool, it works for the model x too

[@ratuldeoun7228]

Yea cause it is classified in the weight category as the g wagon

[@___.51]

Rich enough to buy a model x, rich enough to pay the your taxes lol

[@RuneGM]

@@___.51 rich people don’t pay their taxes my dude these loopholes are how they stay rich

[@adriananzano2292]

@@RuneGM lol exactly

[@nguyentrananhnguyen7900]

@@RuneGM it call play by the rules, and you should learn how to do it to, it is one of many ways that can help you get rich and make you stress at the same time

[@bobsides59]

Except if that vehicle is listed as a SUV you can only write off $25,000 a year. The IRS got wise to all G-Waggon ballers.

[@Micelii]

Good 2 know

[@trent210]

You’re a liar and a fed, bob

[@filthy_cod_casual9304]

Wagggon

[@bryantjones3825]

Apply the remaining amount as a Bonus Depreciation. Now you can write-off the total amount in the same year.

[@layparisss]

What do you list vehicle as to avoid this ?

[@MarinaMogilko]

My CPA disagrees haha. She says it's a luxury vehicle and falls under a different category.

[@007Nox]

Wrong

[@kejreed6233]

it actually doesn't

[@TMartins379]

Yep, I got a GX 460 and a LLC for my photography and videography business. Wish me good luck next tax season.

[@michaelwalker8870]

how did it go?

[@JonathanRootD]

​@@michaelwalker8870he got audited 😅

[@fica1137]

Did they execute you?

[@FleetTech97]

I love how people on TikTok just said just buy a g wagon and write it off. Like you can just claim 150k in expenses when you don’t even have a business

[@Yugiboii]

Then this video aren’t for them, simple

[@mattwenner8291]

Funny thing is you can actually create an LLC with your own money. The smart rappers do it a lot to secure they’re money and just get loans instead

[@GlorifiedGremlin]

This video is literally catered towards business owners. That's who it was made for genius

[@Tom-pe4iw]

I'd get the model X for this, cheaper running costs, especially with the recent gas prices. 😂

[@mihailmilenkov6223]

People at that level couldn’t care less about the cost of running

[@petepatton7496]

Electric vehicles are all garbage

[@__aceofspades]

Tesla's are junk though. Terrible quality control, full of plastic, auto pilot doesn't work, and the replacement batteries/part mean they have terrible resell value

[@corgi42069]

@@mihailmilenkov6223 spoken like someone who knows nobody who lives at that level 🤣

[@montyi8]

@@mihailmilenkov6223 actually it does, every expense is magnified at that level

[@slang3180]

This is misleading, you’re still paying most of the price of the GWAGON out of your pocket, only reducing your taxable income which means you may be paying like 20-30k less in taxes

[@alexnezhynsky9707]

Same thing with any business expense. You're paying for it with your own money. There is no magic there.

[@yannsylvester3680]

Yea but the alternative might be like a shuttle service for multiple company rides each day, which might cost $150 300 days a year as a fixed rate for 5 years. In this case, w 12% discount rate the cost would be $162,216 in today’s dollars. Using a 25% effective tax rate, this would mean by writing this cost of as a business expense you reduce your tax burden by $40,554. If we look at the company vehicle like a project we can calculate the npv of purchasing the vehicle too. Also because of time value of money the 5 year depreciation schedule is significantly worse. Let’s say the firms required rate is 12%. So let’s discount the $170,000 by 12% for 5 years. The present value of the total tax deductions of that vehicle is only $96,458. Whereas Chapter 179 it would be $170,000 (optimal timing). After factoring in the value of intangibles such as marketing and respect from clients, this difference between depreciation could mean make the difference between purchasing the vehicle or not. Example: Let’s assume purchasing the vehicle results in $40,000 in marketing value each year. The small difference between the charter and the vehicle under chapter 179 may be more than offset by intangibles. However the difference between the 96k and the 162k might not be offset by intangibles. So chapter 179 schedule made the difference in the firms decision to buy the vehicle.

[@siege2928]

Tax evasion by legal means...

[@slang3180]

@@yannsylvester3680 yes I understand that, but he makes it sound like you should make a LLC just for the purpose of owning a G wagon

[@drnobody1006]

If you used the thing in your head you would realize how much 20-30k is….. Especially to small business owners……..

[@siddharthk.sekher1960]

"You write it off!!! Who writes it off???!! IDK !! The write off PEOPLE!! "

[@Jeremy.Bearemy]

*Seinfeld theme in my head

[@abingham3747]

"The reason so many people have them" Me literally seeing 2 of these in real life and I live outside a major city.

[@AgustinBernardo]

Bitch please, I'm from Argentina, I'm never seeing one of those

[@MikeLocke]

😂

[@wilderhund98lastname28]

​@@AgustinBernardo Say what you want about volkswagen, but their cars are certainly efficient

[@AgustinBernardo]

@@wilderhund98lastname28 🤣🤣

[@nicollasleoncio7517]

I live in Florida and I see these every single day lol

[@TolandTheShattered]

As a MB tech, I can attest to this. I see so many G Wagons come in with LLC names for the contact info for the repair order. It’s nuts, and so many people within the dealer don’t know this.

[@kieranwhitton-booth5354]

Is the only benefit of this just saving the money up front as opposed to over 5 years? There’s no additional savings correct?

[@yannsylvester3680]

Actually this is huge though. If we look at the company vehicle like a project we can calculate the npv of purchasing the vehicle. Also because of time value of money the 5 year depreciation schedule is significantly worse. Let’s say the firms required rate is 12%. So let’s discount the $170,000 by 12% for 5 years. The present value of the total tax deductions of that vehicle is only $96,458. Whereas Chapter 179 it would be $170,000 (optimal timing). After factoring in the value of intangibles such as marketing and respect from clients, this difference ($170,000 vs $96.5k) might result in a firm undertaking the project using NPV method.

[@drogerflav6350]

Think of it as money present va money future with inflation money future is worth less. 5000 today buys more than 5000 in 5 years

[@thedalillama]

You are correct. I will add that the Section 179 deduction limit for SUVs is $26,200 regardless of weight. The loophole was closed years ago. There's no magic here.

[@chickenkfc3889]

For my UK brudda that's UK Super tax Allowance. 25p per pound ( money ) not weight

[@justanotheraviator2357]

Especially useful for commercial vehicles

[@EpsteinDidntKillHimself.]

You can also do this with basically any other vehicle and 179 it in the first year. I prepare taxes for business owners. Huge majority buy trucks if they want to dump income, more expensive (bigger write off) and way more practical. Also, if you completely write off a 170K car you’re going to have a massive gain when you sell it and recapture depreciation.

[@carlosrivas3004]

What about the gas to haul around all that weight

[@samerb9169]

Car deduction idea is great. Thanks for sharing.

[@Duke_of_Prunes]

SIX THOUSAND POUNDS?! The 1997 F150 my business runs is only 5,500 pounds!

[@AndresGonzalez-gg7nu]

Probably gross weight not curb? I'm just guessing

[@jbdfd8779]

You should see the wagons roll up to my kids daycare

[@imxploring]

Vehicle deduction under section 179

[@morbotheturtle3796]

Soooo, you spend $140k to save $30k in taxes, but then lose $30k from depreciation within the first year. So you’re out $110k or have $110k in debt. Not exactly a smart move. There’s a reason why Bezos was driving a honda accord when he was a multimillionaire.

[@KSmith007]

Just got mine

[@usudolf6606]

at the end of vid i was like yes i will follow u and sub then i scroll down and im alrdy subbed. nice

[@bmw530]

So good looking cars on the road arent from owners salary its from people who work in ur company, explained

[@Art_Nelly]

Answered a question I didn't even know I had, thanks!!

[@tomlxyz]

Sounds bad for environment to use more fuel to carry more weight around. Bad incentive from the government

[@sandmansleeps]

Didn't know. Now I do. Liked and subbed. Thanks!

[@croberts023]

Unless you pay for it in cash, the year 2 principal payments that you can’t deduct will cause you to clawback some of those year 1 tax savings. Also, why spend $170k to save $40-50k in taxes??

[@vitsadelhole]

You are spending 170k receiving say 40k so really 130 total but you still own the 170k asset

[@AngelofD69]

Because F the gov

[@MikeLocke]

Does the g wagon deduction apply to someone who files as self employed? ie a realtor?

[@HT-vd4in]

You guys can fully deduct cars that you only use 50% for business purposes. In Germany we have to pay personal income tax for 1% (for Hybrid and Electric cars 0.5% or 0.25%) of the sticker price each month when we use a business car privately

[@ponyboyack00]

Ol Bush #2 signed this one into law. Burn lots of fuel. So, made a ton of tax exemptions on heavy vehicles.

[@Mr_Whats_His_Nuts]

Cool, the only thing is what kind of LLC is best for tax loopholes. Nothing wrong with it if it's legal.

[@rmart008]

How about my $500 gross income business 🤪

[@pzpinkslip123]

Write off your bicycle I guess

[@EpsteinDidntKillHimself.]

I hate to break it too you but you’re gonna owe about $50 in taxes. Might want to setup quarterly estimated tax payments next year to offset some of this burden 🤣

[@mrgrimreaper94]

Omfg so what if i bought a 4runner top model and right it off for my mobile detailing business?

[@chromestorms7311]

Classified as an suv so you can't write it all off but you could still offset your taxes by doing so.

[@J3rr3LL]

Wow, I see a looootttt of these now-a-days, too.

[@tummyhawk9274]

My family used this rule for their suvs

[@psilocyrapter]

That would explain why so many of my former customers had Gwagons or otherwise... Dayum. That's insane. Good to know though

[@Supra_Mickey]

People don’t realize that this car is super top heavy and working on these cars aren’t the best to own either maintenance or repairs. You over pay for you oil change nothing special is done. People want it just as a status

[@no1bandfan]

G-WAGON! G-WAGON! G-WAGON! G-WAGON! G-WAGON! G-WAGON! Wait… wrong channel.

[@ryanmark4660]

My boss has that same exact white g wagon!! Wow explains a lot now ! Haha

[@mfax1000]

I'm following you now. Just subscribed.

[@Evereghalo]

You can take this deduction as a sole proprietor

[@copiouscat]

Really?

[@layparisss]

No you can’t. You need an EIN not SS #

[@Kaje376]

That explains the car thing in @Ryan Trahan' s series lol

[@stonefaced4578]

No Ram trucks?

[@inalienablerights]

You also have to make enough money for it to matter. If your business made $50k, good luck.

[@allywolf9182]

I saw 4 runner and x5 on there too?

[@copiouscat]

Even the grand Cherokee too pretty standup list

[@Azimii]

might be a good idea to work on thumbnails for the shorts. good for looking for specific topics or to see if something jumps out at you.

[@greengoat5654]

Or you could buy a commercial vehicle of any amount of cost that seems reasonable for the size of your business, and boom, you're really moving

[@greengoat5654]

Like, that's a whole fleet of Transit connects

[@jeremytheimer7443]

Canada has a similar law except only up to $25k not 200k.

[@filipgibarac8283]

“Chrysler Pacifica” id rather walk

[@svndwich977]

Wait till it breaks down and you need to push it

[@makerealestateeasy]

The Jeep Rubicon diesel weighs over 6000 pounds FYI

[@pullt]

The real trick is generating net income....otherwise the expense is irrelevant.

[@adaml2932]

In order to take that deduction does the vehicle need to be registered in the name of the business, ? Does it also need to have commercial plates and a commercial auto insurance policy?

[@pittsburghmike9569]

Nope

[@ph3733]

It doesn’t save you any money. You just can write it off in one year instead of five but the write off amount remains the same. You still have to fork out $150k. You’re better off by buying a Camry. Saves you more money.

[@OttoTheWeim]

Another good one that qualifies is the new Jeep Wrangler Unlimited with the ecoDiesel engine. The ecoDiesel makes it over 6000lbs so it qualifies for the business write off.

[@JParkin10]

Most of the cars listed at the end don’t weight anywhere close to 6k lbs.

[@dakotafrazier2985]

It's also not smart to deduct all of the money in one year. It's smarter to claim over the next few years.

[@elperrocovero]

Explain

[@dakotafrazier2985]

@@elperrocovero okay you buy a $10,000 car as a business expense. You claim it on your taxes. you can either write of the full 10k or 2k each year over the next five years

[@joenavolio2847]

google puts the curb weight for a brand new g wagon at 5500 to 5800 lbs. That is less than 6,000 lbs

[@edubbs9853]

The gross weight is over 7K

[@matthewgoulamanian5968]

then the money to maintain them smh

[@clementeruizgordillo758]

Thank you

[@jr303official]

This is why so many Construction company owners always have nice new 1ton trucks, yet do no work with it.

[@ilianafernandez1935]

How do you reflect in P&L?

[@imzjustplayin]

This tax code applies to new and used vehicles so long as the vehicle is new to you.

[@hbgriss]

As the average person struggles and pays …..

[@pwnzindaface]

I want a G wagon LLC. We go out of business in 1 year

[@richdevil500]

That would be awesome to do something like this for delivery lol

[@MyShinobiWay617]

Wish we had a Canadian version of you. :/

[@davidx.4323]

The Canadian version of section 179 is called the Capital Cost Allowance. It functions identically

[@DarinPirkey]

just to be clear, an "s corp" is not a business formation. it's a tax designation.

[@Narnicept]

Thanks!!!

[@CelestialxPanda]

Now please show us how to do this with bikes like the Ninja zx10r and a Nissan Gtr nizmo. Both in the US and the Europe

[@YoWassupFresh]

i love declining people for mortgages when they do shit like this. if you need financing in the next 2 years, dont fuckin do this.

[@mrbigstufable]

Why?

[@Alkastik]

The bmw ix is really heavy at 5698.949, was hoping it would qualify

[@killersentra]

Thanks humphrey...Humphrey.... I was wondering if Tesla applied. It does. I wondered how so many were affording these.

[@jorgeblitz2440]

Spend 170k to save $40k. Seems smart

[@TeodorLojewski]

*This is not financial advice.* Those cars maintain their value extremely well, so you can then sell it and enjoy less tax for your business's income.

[@thebigdoghimself]

I don't get your list an expedition weights under 6000 lbs, a grand Cherokee weights under 5000. Even a model X weights less than 6000.

[@BraZyBagZ]

Some are close enough to pass

[@ttrruaminpn5755]

Always had a question about vehicle for business use. How would IRS know how I used it? And if I need to keep a record, then could I not make things up?

[@RoninGamingFox]

Omg it all makes sense now

[@balloon7952]

Why so many tabs. I would be hitting crl w all day

[@princebobby6048]

How do you know all this stuff bro .... very impressive

[@robertcalifornia3267]

A Chrysler 300 is about 6,000lbs. Why doesn’t that qualify?

[@HansBelphegor]

So are ram trucks

[@a902l9]

Bentley should be on that list too

[@eaglewitharifle]

Now if only I had a business

[@CRYPTO-FEVER]

Would this work with the dodge ram TRX?

[@jakebrubeck2312]

What happens if your business makes $150k and you wrote off a $170k car? What do they do with the $20k? Refund? Applied to next year?

[@41vids]

My same question! Is this only recommended for people with super high incomes?

[@Alex-vk6hq]

That's a lot of words....

[@GabrielSilva-dg6tf]

This tax rule sound like it was made for favor a certain domain of the car market ... Big corporations make your laws.

[@Coreydarn]

It says write off the DEPRECIATION not the entire cost. You still have to be a small to afford a freaking g wagon😂

[@timthomas1607]

Just remember you won't have any depreciation to off set future payments

[@volkankantarci8209]

What happens if you sell it next year???

[@txth6051]

you’d pay tax on the money you got for selling it

[@Okie93]

Also just learned that if you take too many deductions, your income may be so low that you won't be able to get a bank loan. Consider that before you deduct all expenses out in one year.

[@dredgenyor1674]

haha my peterbuilt is also a tax write off😊

[@PumpkinKingXXIII]

Yes but when you sell or trade it it’s profits and taxable

[@IAMJAKETRIMBLE]

This is why every business owner owns an SUV or Truck even if they don’t need them. My step mother used this to buy her Range Rovers even though she hardly EVER drove it. 50% business purposes my ass. IRS ain’t tracking your mileage.

[@truckerlifein3]

I got S corp but when’s I did talk about my Car I use 80% I use for business porpoise but my CP told me I can’t

[@alrhex]

How does IRS track if you used the car more than 50% for business?

[@FRESNOSTATE1559]

The vehicle should also be a basic one and not luxurious but it’s all part of the plan I get it

[@janvanhoyk8375]

These kinds of tax loopholes are silly, but ultimately I respect the intent as theoretically this sort of thing is intended to encourage people to start small businesses and make it easier for business owners in general to operate