Business vehicle purchase (tax question)

[homeymomma]

Hello! Thanks in advance for any clarification. I have scoured the interwebs and I'm still SO confused about vehicle depreciation/tax savings for a small business.

I have a single person LLC (I'm the owner / only employee), and I do home visits for my job, local only. I drive about 4-6K miles per year. So far I have been using our 2012 commuter car, but it is having some end-of-life issues so I'm trying to figure out how to buy a car for my LLC.

Am I correct in thinking that if I, as my business, spend 30K on a car, I can write off 12,400, plus a bonus 8,000 in 2024? The following year I would write off the remainder?

I am married and my spouse has a single-person LLC, taxed as an S-corp. He will be in the same situation this year or next. His car purchase would be around the same price point. Hoping what applies to my question applies to him as well.

Section 179 seems important here, as well as IRS limits on vehicle depreciation. I just want to make sure I'm not buying a vehicle thinking I can write off 20,000 and it turns out I can only write off 8K!

Other questions that have been on my mind:
Does it matter if we buy the car in June or December? Is there a pro-rated thing where you can only write off for the portion of the year you owned the car?
If I am strict about only using the car 100% for business for the first year, to claim 100% of the depreciation deduction, can I use the car for partial personal use in later years (i.e. claim 100% business use in 2024, then claim only 70% business use in 2025?). To do this we could hold on to our old car to allow for occasional personal use to maintain the business car for business use only.

Thank you so much to anyone out there who may have already figured out these things and can explain them better than 50 articles on Google!

[morethanconquerors]

For 2023, the maximum depreciation you could take on a passenger automobile <6,000 lbs if used 100% for business was $20,200. This was $12,200 of Section 179 + $8,000 of 168(k) Bonus Depreciation. If a truck >12,000 lbs, there is no limit to 179.

If the business usage drops below 50% in a subsequent year, then you would need to recapture the Section 179 depreciation that was taken on the vehicle.

As long as the vehicle is "in service" before 12/31/24, you can use 179 + Bonus.

Titling the vehicle is another item to consider. If the business is a SMLLC, Sch C business, you can either title the vehicle personally or in the LLC name. Your insurance may have a different rate if titled in a business name, so that is one item to consider. If an S-Corp is involved, it can be more complicated. For an S-Corp to deduct vehicle cost, the vehicle must be titled in the S-Corp name. However, one common strategy is to title the vehicle personally and pay for all vehicle expenses personally and then get reimbursed by the S-Corp based on business mileage at the standard mileage rate. If set up like this, the S-Corp gets to deduct the reimbursement to the individual and the individual does not need to recognize any income from payments received.