Time running out for Model X 2017 *massive* business-use tax deduction

[rjdoc74]

@CarbonFree Yes, they do work in 2018 BUT the 50% bonus depreciation is reduced to 40% then, from what my tax person told me. 2017 is the end of the big discounts.

Nope, I have no financial relationship with Tesla other than getting a Tesla solar roof priority token (which I don't need as I live in a condo) if someone uses a referral from me (they can have it -- or you can have it!). I'm an eye surgeon (like seemingly 10% of the other owners on this forum!). I was recently made aware of this and am jumping at the chance to lock in the full write off before end of 2017 and thought I'd share. On top of that, when we bought our Model S, our OA in Century City, CA bent over backwards to accommodate an insane request we had for a change to the car DURING production -- thanks to him they took the car off the line and made the change free of charge, just to keep us happy. In return (he never asked), I promised to give him an opportunity to help people out who are interested in a purchase

Maybe I should quit my day job and work for Tesla, eh? haha

O.M.G. Accountant. Eye surgeon. Philanthropist. Melania fan.

 

[MelaniainLA]

O.M.G. Accountant. Eye surgeon. Philanthropist. Melania fan.

LOL @rjdoc74 !!! Melania name is tongue and cheek -- when we got the car, we had to choose a name -- we looked for a name that would describe our car -- sexy yet fierce! I think we nailed it. You crack me up!

 

[doctheseus]

Nope -- if you are an employee (paid on a W2 and work for someone else) you cannot claim a business deduction for commute but you CAN under certain circumstances claim unreimbursed mileage during work as required by your job -- for example, if you did pizza delivery and were paid as an employee. These deductions are intended for people who are business owners and use the car as a business vehicle -- for example, a doctor going to the hospital on call, a real estate agent taking customers to see houses, a consultant visiting clients, etc. Commute is NOT deductible, otherwise everyone would be doing it.

I am a physician who does take call, but am employed and get paid on W 2, anyway will consult a CPO if I can claim this...

 

[bhzmark]

Buying it at the end of December, truly using it 100% business in December, and then staying above 50% the next few years, might work.

But otherwise, how do you plan to drive the MX 100% for the business of your eye surgery practice in order to claim the bonus depreciation? Are you an eye surgeon for cattle in Wyoming and drive to various farms all over? And you won't take family or other personal trips in the MX?

I think it is risky.

The deduction is really for people who use the car 100% (for the bonus depreciation) or at least 50% business for general depreciation deduction. It isn't worth the risk otherwise.

For most people it is better to just take the mileage deduction for whatever car you drive for the actual business (non commuting) trips that you take and sleep better at night.

I'm an eye surgeon

am jumping at the chance to lock in the full write off before end of 2017

what my tax person told me.

 

[LyftupX]

Don't forget Lyft or Uber driver ....

My scenario is purchase use on elite levels (select, premier, lux, XL)

100% December or close to that.

Then it's wife's daily driver , and I use it easily 60% mileage wise during the year. 2-3 good weekend pushes alone would put me at that.

Currently average $1.60 mile net for every mile driven I'd aim for $2+ using the X. Gas savings at least $2-300 monthly.

I owe $8 k in taxes now ... maybe closer to 10$ by year end. 1099 gig self employment and higher tax bracket with wife stings.... I need to find some benefit and doing this is one I can see working out. Justification is nicer car = more $$ on rideshare.

Getting audited like the poster above says would be the only headache. I document all miles now, and we have pretty straight forward returns over the years but man that would suck

 

[rjdoc74]

I am a physician who does take call, but am employed and get paid on W 2, anyway will consult a CPO if I can claim this...

The only way to do this, partially or fully, is to have 1099 income. There is no way to do this being employed with W2 income.

 

[MelaniainLA]

Buying it at the end of December, truly using it 100% business in December, and then staying above 50% the next few years, might work.

But otherwise, how do you plan to drive the MX 100% for the business of your eye surgery practice in order to claim the bonus depreciation? Are you an eye surgeon for cattle in Wyoming and drive to various farms all over? And you won't take family or other personal trips in the MX?

I think it is risky.

The deduction is really for people who use the car 100% (for the bonus depreciation) or at least 50% business for general depreciation deduction. It isn't worth the risk otherwise.

For most people it is better to just take the mileage deduction for whatever car you drive for the actual business (non commuting) trips that you take and sleep better at night.

Agreed. Would only depreciate based on actual business use. I am a full time biotech consultant paid on 1099 for a sole proprietorship business (eye stuff on the side) so I'm driving from client to client.

We have an S with 7 seats that we would use for family trips etc. problem solved.

 

[rjdoc74]

Agreed. Would only depreciate based on actual business use. I am a full time biotech consultant paid on 1099 for a sole proprietorship business (eye stuff on the side) so I'm driving from client to client.

We have an S with 7 seats that we would use for family trips etc. problem solved.

Where do you do your eye stuff on the side? I am gonna make an appointment

 

[MelaniainLA]

Where do you do your eye stuff on the side? I am gonna make an appointment

LOL I care for uninsured patients, homeless, prisoners etc at a County hospital. All for free. The best way to practice medicine.

 

[KBRE]

I spoke with my CPA about this and he says it really doesn't matter. He will depreciate the cost of the car over the time I own it anyway so no real benefit to get the full 25k off the first year for me. He says if I only had the car for a year then for sure but otherwise there is no benefit. Hope this helps

 

[KevinY]

I spoke with my CPA about this and he says it really doesn't matter. He will depreciate the cost of the car over the time I own it anyway so no real benefit to get the full 25k off the first year for me. He says if I only had the car for a year then for sure but otherwise there is no benefit. Hope this helps

The benefit would be, if you had a need to reduce your gross taxable income.
Who knows how long your going to own the car.
Under 179 I always take the maximum deduction possible and depreciate the remaining value.

 

[mongo]

I spoke with my CPA about this and he says it really doesn't matter. He will depreciate the cost of the car over the time I own it anyway so no real benefit to get the full 25k off the first year for me. He says if I only had the car for a year then for sure but otherwise there is no benefit. Hope this helps

Why does CPA not think that cash on hand now is better than cash later? Opinion: Need to get your financial advisor in the mix.

 

[nrigali]

I drive my car 95%for business, driving to see client so I am using this deduction myself.

You can also just depreciate the vehicle over 5 years and take a smaller deduction every year and spread out the tax savings, but in some cases it may make sense to take the bigger deduction in year one.

 

[idleuser]

Do you have to be on a 1099 to use this? I am employed on a W2 but most of my driving is related to business use. For example, I drive 10,000miles a year that is related to my job (I actually get reimburse for mileage) and the remaining 5000miles is related to personal use.

 

[kort677]

Do you have to be on a 1099 to use this? I am employed on a W2 but most of my driving is related to business use. For example, I drive 10,000miles a year that is related to my job (I actually get reimburse for mileage) and the remaining 5000miles is related to personal use.

you'd be wise to tread softly, do you realize that the money you are reimbursed could be subject to be treated as income?

 

[OBX John]

Dear Tesla,

Can you make a heavy Model S P100D on short notice? Maybe put an extra battery pack in there somewhere?

Thanks!

-Model S fan who still wants a big deduction

 

[lux_cars]

I spoke with my CPA about this and he says it really doesn't matter. He will depreciate the cost of the car over the time I own it anyway so no real benefit to get the full 25k off the first year for me. He says if I only had the car for a year then for sure but otherwise there is no benefit. Hope this helps

There is also time value of money. A dollar saved today could be invested an be worth more than $1 in year 5. $1 in year 5 would have lost some value to inflation and be worth less than a dollar today.

 

[McRat]

The abuse of the tax code in this area is symbolic as to why so many Americans wanted to fire all the politicians last election.

It's intended to allow a more accurate way to depreciate buses, vanpool, or excursion vehicles since they are often replaced in 3 years or less, and the business takes it in the shorts from resale valuation.

Instead it's used to allow yuppies with tanning salons and cupcake boutiques to buy Escalades.

It's no mystery why they didn't put a 9 passenger minimum on them. Politicians like Escalades as much as other people do. As long as they use them to haul a box of flyers to the Post Office, they get the write off.

 

[number12]

For people with qualms over 100% business use... buy a back up 2016 Nissan Leaf new for $15K and say that's for personal use. Tax savings might pay for car.

 

[number12]

The abuse of the tax code in this area is symbolic as to why so many Americans wanted to fire all the politicians last election.

It's intended to allow a more accurate way to depreciate buses, vanpool, or excursion vehicles since they are often replaced in 3 years or less, and the business takes it in the shorts from resale valuation.

Instead it's used to allow yuppies with tanning salons and cupcake boutiques to buy Escalades.

It's no mystery why they didn't put a 9 passenger minimum on them. Politicians like Escalades as much as other people do. As long as they use them to haul a box of flyers to the Post Office, they get the write off.

This 'Mercia.

Until tax law becomes remotely fair.. these 'loop holes' are the only thing slightly leveling the playing field.