You probably like your personal vehicle just as it is.
But wouldn’t you like it far better if it were producing tax deductions? Perhaps big deductions, immediately. And the Tax Cuts and Jobs Act (TCJA) gives you the tax reform road map on how to do this.
Of course, to make this happen, you need to strip your personal vehicle of its personal status and re-dress it as a business vehicle. This is not difficult, as you will learn in this article.
In its new business dress, your former personal vehicle can qualify for up to 100 percent bonus depreciation.
Example. Sam has a personal vehicle with a tax basis for depreciation of $31,000. With 70 percent business use on this 100 percent bonus depreciation qualifying vehicle, Sam has a new $21,700 tax deduction for this year ($31,000 x 70 percent).
Let’s examine what you would need to do to make this work for you and how much you could write off this year.
Depreciating a Former Personal Vehicle
When you convert a personal vehicle to business use, the law sees you as placing the item in service in your business at that time. That means you can begin ... Log in to view full article.