| Author | Message | ||
| Thomas I (Wax)
Member Username: Wax Post Number: 434 Registered: 7-2003 |
I do 1099's with Scedule C Profit/Loss (and numerous other forms) & write off at least $10K annually for mileage. There's also depreciation - muahahahahaaaa. | ||
| James Angle (Jimangle)
Junior Member Username: Jimangle Post Number: 93 Registered: 9-2002 |
Randall, I'm in the af, and recently purchased a 79 308. I would probably say that you could write off the gas expense, and a few odds and ends if you used the car for recruiting new troops and had a big ass Go Navy Sticker on the side of it. | ||
| P. Thomas (Ferrari_fanatic)
Member Username: Ferrari_fanatic Post Number: 603 Registered: 4-2003 |
Well that is the thing: You can only take one or the other. The standard 32.50 cents per mile OR the maintaince. Futhermore, the IRS wants to know the total # of miles driven, and the total number of miles for personal use. They would then only give you the business percentage use of the car. Furthermore, your write off would decrease your tax liabilty by X. Multiply X by 28% (assuming that is your tax bracket) and that is your actual dollar savings in your tax bill. | ||
| Randall (Randall)
Member Username: Randall Post Number: 690 Registered: 1-2003 |
I'm not looking to write off the whole car, but rather some maintenance. If I were to be a recruiter, I would drive it to highschools from my place of work. I thought maybe that mileage and maybe the standard 3k, 15k, 30k services that would tally up with those miles might be able to be written off at tax time. | ||
| P. Thomas (Ferrari_fanatic)
Member Username: Ferrari_fanatic Post Number: 602 Registered: 4-2003 |
I have heard of stories of the IRS Agent asking if the Business was listed in the Yellow Pages. Couple that with zero Revenue and I think that you have a perfect recipe for an audit. That is provided anyone is really reading the 1040. Some of the best (most aggressive tax advice) has come from people that say I did "This" and I never was questioned. I am not being faceitous when I say that that a live body at the IRS has not actually read your tax return. As long as you falk into a general bracket of your deductions I do not think that it will trigger any red flags. That still does not mean that it is either A) Legal. B) Defendable if you fall into the jaws of an IRS audit. | ||
| Horsefly (Arlie)
Intermediate Member Username: Arlie Post Number: 1495 Registered: 5-2002 |
"Can you imagine you hire a business consultant for your company to help you sell $ 50,0000,000 in products next year and he shows up in a 1995 Toyota Corolla?" If your company is holding high level meetings concerning $50,000,000 worth of products, isn't it likely that such meetings are being held in a large, high dollar, office complex or high rise office building? And how is anybody going to know what kind of car you drove up in, considering that you had to park your car in a lot or parking deck 3 or 4 blocks away??? What difference would it make if you drove up in a Toyota or a Ferrari? Or maybe you drove up in a taxi cab from the airport because they flew you into town for the meeting anyway? Sorry, but I don't think most people who are REALLY financially savy are going to be impressed just because of the car you drive. For all they know, you could have rented it for the day! As for having a race team to justify owning a Ferrari as a business expense, wouldn't your race team eventually have to show a profit, or the IRS would disallow the whole thing? Not giving you a hard time Martin, just prolonging the debate. | ||
| P. Thomas (Ferrari_fanatic)
Member Username: Ferrari_fanatic Post Number: 601 Registered: 4-2003 |
Just another quick note. Let's say you did to take the plunge and you decided to write off $10,000 in expenses, assuming a 28% tax bracket your dollar for dollar tax savings would be a somewhat nominal $2,800 ($10,000 write off TIMES 28% tax bracket). Futhermore, you would need either a "2106" Form (Non-Employer Reinburst Expenses) or a Schedule "C" for Self-Employed earnings. Schedule "C" filers have much more flexibilty. Feasably, ALMOST ANYTHING could be a Business Related Expense if it was related to conducting your business. Regretablly, it is also the group that is most scrutinized as there is a HUGE subjective interpetation (gray area) relating to legitimate Business Expenses. Keep good records and remeber that one day you may have to defend yourself against an IRS Agent. Best of Luck. | ||
| Dr. J C928 (Attitude928)
Junior Member Username: Attitude928 Post Number: 97 Registered: 11-2002 |
Buy a Lambo LM002 through your corp. You can fully depreciate a truck, whose weight including payload is over 5000 pounds. Otherwise, depreciating expensive cars (over $12,500) thru a corp just costs too much in taxes. I like Martin's idea. Maybe you'll even win some races! | ||
| P. Thomas (Ferrari_fanatic)
Member Username: Ferrari_fanatic Post Number: 600 Registered: 4-2003 |
There are two ways to calculate your write off regarding Business Use of your car: 1) Straight mileage calculation. This year I beleive it is still 32.5 cents per mile. This means that if you claimed you used your Ferrari (or any other car), let's say 3,000 miles per year then your write off would be $975.00. 2) Cost of maintaince. You would add all of the cost that you spent that year on your car including depreciation. Also included are bridge tolls and parking fees. All miles must be Busines realted and can not include commute miles (those miles must be deducted from the total miles driven). You can deduct THE GREATER OF THE TWO, NOT BOTH. So, if you only drove 2000 Business miles and you claim it cost you $15,000 that equates to $7.50 per mile. Try explaining that one to an IRS agent. Statistically less than 1% of all tax returns are randomly audited. Schedule "C" filers (self-employed) have a significantly higher audit rate than W-2 wage earners. Once you have been audited, the IRS can go back and audit you for the previous 7 years..Ouch! I use Intuit Turbo Tax and it will flag you if your deductions are too great and would historically trigger an audit. I would be very hard pressed that anyone is actually reading A LOT of these tax returns. If you do get a notice from the IRS in an Audit, the best tax Attorney will tell you to pay them first, and then try to get your money back later (guilty until proven innocent). I am not a Tax Attorney and am not giving any legal advice (just my vast and pragmatic knowledge of our wonderful tax system). | ||
| DES (Sickspeed)
Senior Member Username: Sickspeed Post Number: 6754 Registered: 8-2002 |
Bart Duesler uses his 550 for business, so i think he would know what can and can't be written off at succubus time... i'm surprised he hasn't seen this thread... Someone call him... Bart...! BAAAART...! | ||
| Dale W Spradling (Drtax)
Member Username: Drtax Post Number: 414 Registered: 4-2003 |
Randall, it can be done and, yes, Martin's suggestion is the best way to do it. If you have a bidness, it can also sponsor the car so long as all transactions are at arm's length and you can justify the business reasons for the advertising. Outside of racing, the first hurdle is the business use of the car. Keep in mind that commuting is ALWAYS personal. (Commuting equals home to first business stop, and last business stop to home.) Sorry bout dat, Doc. But just because you are on call, doesn't transform a personal commute into a business trip. Once over that bridge, next problem are the luxury car depreciation limitations. Generally, you can only deduct about $5k a year or so. HW, I have suggested that a 3x8 car can be the best way around the depreciation limitations versus leasing/buying a modern Ferrari. Say that the payments on a 360 or 355 are $2,000 a month. Let's also say that the payment for a 328 is $750 a month. (I haven't a clue if these numbers are right, but it's my example so I get to cry if I want to.) Both cars will be subject to the depreciation limitations. However, let's say that you also spend $500 a month on average having the 328 serviced. So long as the $500 a month in service costs do not extend the life of the car (no problem proving this point, eh?), the servicing costs will be fully deductible, unlike the depreciation. And, no, Dave, you never even have to disclose on your tax return that you are depreciating a Ferrari. I always use "Car" in the description field. There's more... but I gotta get back to work. Just don't try this at home without reading and following all label directions... of which there are none. Dale Remember, I am not your CPA, and you are not my client. Moreover, free advice is always worth what you paid for it. | ||
| Dave White (Dwhite)
Junior Member Username: Dwhite Post Number: 149 Registered: 5-2003 |
Start a car restoration business. You can say you use the car for an example of your work or a work in progress. You don't even have to restore cars you can be a consultant, saying you give advise to people on how to restore cars. | ||
| Martin - Cavallino Motors (Miami348ts)
Senior Member Username: Miami348ts Post Number: 6275 Registered: 5-2001 |
The other way is: incorporate a Race Team, own the car as that race team, sell ad space on the car to yourself and write it off your current company as an expense. The income on the race team will be used for maintenance, insurance, interest etc. | ||
| Martin - Cavallino Motors (Miami348ts)
Senior Member Username: Miami348ts Post Number: 6274 Registered: 5-2001 |
As a recruiter you certainly can. The word here is justifyable. Can you go to court and make the argument that it will further your business if you drive a Ferrari instead of a Honda Civic. I will give you a perfect example: My wife is a successful real estate broker dealing in high end property. Can you imagine showing a $2.500.000 home in a Honda Civic? What would you think of the quality of service you get from such a broker? See her drive up in a high end automobile (first impression) and her skills are unquestioned. Like it or not the car is a symbol of success. The flashier the car the less your ability will be questioned. It is getting the foot in the door. Can you imagine you hire a business consultant for your company to help you sell $ 50,0000,000 in products next year and he shows up in a 1995 Toyota Corolla? The flowershop owner will have a hard time justifying it, the recruiter will not. The heart surgeon will have a hard time, the plastic surgeon who's ads appear on TV during the day will not have such a hard time. | ||
| William H (Countachxx)
Advanced Member Username: Countachxx Post Number: 3227 Registered: 2-2001 |
other than being a racing team, maybe you could take some maintenance off if you keep excellent records, but the IRS could ask you why you dont just drive a Honda Civic to work  | ||
| Dave (Maranelloman)
Advanced Member Username: Maranelloman Post Number: 2914 Registered: 1-2002 |
Randall, good luck with that... I suspect the IRS has the word "Ferrari" in its top 10 list of red flag deduction words... | ||
| Dan Gordon (Ferruccio)
Junior Member Username: Ferruccio Post Number: 227 Registered: 2-2003 |
Can't you just put your buisness name on it and deduct it for advertising? Or start a buisness selling video tapes of it......or something like that? | ||
| Horsefly (Arlie)
Intermediate Member Username: Arlie Post Number: 1492 Registered: 5-2002 |
You could probably only get away with it if you were recruiting people to work at a Ferrari dealership or garage, or maybe a sports car garage or repair shop. I don't think you could get away with deducting a Ferrari as a business expense if you made and sold flower pots for a living. You can't just use it for work. The "work" has to be related in some way to that specific type of car. A friend of mine is a doctor who is "on call" 24 hours a day, rain or shine, clear or SNOW. So he can legitimately purchase his 4 wheel drive truck as a business expense because he LEGITIMATELY uses it to get to the hospital in extremely bad snow and ice conditions when emergencies arrise. Sort of difficult to justify a Ferrari under most circumstances. | ||
| N'din (Abangdin)
Junior Member Username: Abangdin Post Number: 82 Registered: 7-2003 |
Great idea Randall. Then maybe more people can own Ferraris. | ||
| Randall (Randall)
Member Username: Randall Post Number: 689 Registered: 1-2003 |
Is there any way that repairs/maintenance can be written off at tax time? What if the vehicle is used for work in some way? I'm asking because someone mentioned I should be a recruiter and go to highschools with the car and it would probably help to recruit people. |