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Section 179 tax benefit question

themaryannie

Member
Dec 14, 2018
25
13
Utah
I'm SURE this question has been asked on this forum...probably a thousand times, but I have searched and can't find my answer.
I am a small business owner and am interested in purchasing a Model X while using the 179 tax benefit. I understand that the vehicle needs to be used for business purposes for at least 50% of the time. The issue is...I'm a dentist and I don't do a lot of "business driving" with my cars. I sit in a chair basically all day and drill teeth.
My question is this - does driving to and from work count as business?
 

ithinkmac

Member
Oct 28, 2013
196
142
SF Bay Area
driving to work does not count. If you need to drive to go visit clients/patients, then that does count. Commuting from home to your place of work does not count.

-ThinkMac-
 

NHK X

Member
Nov 18, 2017
847
693
PNW
I'm SURE this question has been asked on this forum...probably a thousand times, but I have searched and can't find my answer.
I am a small business owner and am interested in purchasing a Model X while using the 179 tax benefit. I understand that the vehicle needs to be used for business purposes for at least 50% of the time. The issue is...I'm a dentist and I don't do a lot of "business driving" with my cars. I sit in a chair basically all day and drill teeth.
My question is this - does driving to and from work count as business?


I’m no tax guy, but I thought that it depends on your employment status. If you are employed by said business, then no. If you are an independent contractor and have an LLC or S Corp then yes.

If you have an LLC or small business you can use section 179. I’ve seen someone purchase on purpose at end of year to make it easy to utilize 100%. As long as you get an X, can do the 25k deduction plus the bonus to write off 100% as a deduction (so I reality around 35-45k depending on your tax situation). But would consult your tax guy or do DD before proceeding. I have an LLC and my tax guy said counting miles to work is kosher.
 

Uncle Paul

Well-Known Member
Nov 1, 2013
6,299
6,879
Canyon Lake,CA
If you have a home office then commuting from that home office to practice works.

You should contact your tax preparer to determine for sure if there is a way to take the Section 179 and accelerated depreciation.

Just realized you posted this question last year. Hope you got your deduction.

Now the Biden is president things like that may change.
 
  • Informative
Reactions: Hasi212

teethdood

Member
Jan 30, 2017
396
524
Visalia, California
This question has indeed been asked many times. You can only deduct the % (has to be more than 50%) used for business. Commuting miles don't count. Having said that, due to the 2017 Trump tax act, the way to write off 100% of the total cost (up to $1M) is to buy an MX toward the end of the year, say the last week of 2020. You then strictly use the car for business during that week and park it at your business (absolutely no commuting miles). Be sure to document every mile. For 2020 then, you used the MX 100% for business legally. You can then deduct 100% of the MX cost for 2020 even though you only drove only a few miles for business. As always, check with your CPA.

Like the other poster said, this may not apply for 2021 onwards depending on new legislation.
 

DoctorVenkman

Member
Jul 29, 2018
428
520
Los Angeles
I’m no tax guy, but I thought that it depends on your employment status. If you are employed by said business, then no. If you are an independent contractor and have an LLC or S Corp then yes.

If you have an LLC or small business you can use section 179. I’ve seen someone purchase on purpose at end of year to make it easy to utilize 100%. As long as you get an X, can do the 25k deduction plus the bonus to write off 100% as a deduction (so I reality around 35-45k depending on your tax situation). But would consult your tax guy or do DD before proceeding. I have an LLC and my tax guy said counting miles to work is kosher.

This is incorrect. Being an independent contractor is not enough to claim the deduction. If you are traveling to the same work site every day, those miles will not qualify for the deduction, regardless of your employment status. The deduction only applies to miles traveling to "temporary work sites" throughout the year. This is defined as a work site where the expectation is you will be working there for less than one year. If your CPA advised you to the contrary I would consider finding a new CPA.

This question has indeed been asked many times. You can only deduct the % (has to be more than 50%) used for business. Commuting miles don't count. Having said that, due to the 2017 Trump tax act, the way to write off 100% of the total cost (up to $1M) is to buy an MX toward the end of the year, say the last week of 2020. You then strictly use the car for business during that week and park it at your business (absolutely no commuting miles). Be sure to document every mile. For 2020 then, you used the MX 100% for business legally. You can then deduct 100% of the MX cost for 2020 even though you only drove only a few miles for business. As always, check with your CPA.

Like the other poster said, this may not apply for 2021 onwards depending on new legislation.

It's important to note here that the IRS can claw back the deduction if you do not meet the minimum 50% business use threshold in future years. So I would not do this trick unless you anticipate you will meet the 50% threshold in future years.
 

NHK X

Member
Nov 18, 2017
847
693
PNW
This is incorrect. Being an independent contractor is not enough to claim the deduction. If you are traveling to the same work site every day, those miles will not qualify for the deduction, regardless of your employment status. The deduction only applies to miles traveling to "temporary work sites" throughout the year. This is defined as a work site where the expectation is you will be working there for less than one year. If your CPA advised you to the contrary I would consider finding a new CPA.



It's important to note here that the IRS can claw back the deduction if you do not meet the minimum 50% business use threshold in future years. So I would not do this trick unless you anticipate you will meet the 50% threshold in future years.

[UPDATED] Can I Deduct my Business-Related Auto Expenses on my S-Corp Taxes?

Basically what I do for my LLC designated as an S Corp. I track all miles for my clinic where I’m an independent contractor as well as all the trauma hospitals I cover.

I hope my tax guy is doing it right, he covers much of the physicians where I live.
 

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