Author Topic: What Business Deductions Can I Take From A Car Purchase? Also Net-Operating Loss  (Read 985 times)

MrMonkeyMoustache

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Own a business, bought a new car so that I could travel to and from it with no issues. Wondering if the taxes and fees associated with the purchase could be considered business expenses, since the per-mile business use was about 33%. I know the exact mileage I drove for business-related things, and I know the standard deduction of 54 cents/mile is better than the actual expenses. My question is more about the fees and interest associated with the purchase of the car.

It's a sole proprietorship LLC, so it receives pass-through taxation.

I also had a NOL last year, and not really sure how I'd roll it over into this year.


Axecleaver

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You have to choose between deducting actual expenses, or using the standard mileage rate. Mileage is a lot easier to track, and a lot easier to defend in the event of an audit. If you deduct actual expenses, I believe you have to depreciate it.

You could look into doing a Section 179 deduction, which means you wouldn't have to depreciate it. I believe you have to use the vehicle for business purposes at least 50%. Here's the rules for writing off vehicles under Sec 179: http://www.section179.org/section_179_vehicle_deductions.html