I did buy an MX for my business and got delivery in November 2017. I'm trying to claim the 100% bonus depreciation while filing my return in Turbo Tax, but can't seem to get the write-off unless I classify it as an asset (which vehicles are exempt per Turbo Tax). Any idea how I can file please?
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Time running out for Model X 2017 *massive* business-use tax deduction
- Thread starter MelaniainLA
- Start date
I'd figure out which interview question populates the right line in the form and ignore what Turbo Tax says is allowable. If you direct fill, it may not do the final audit check.
Been using TurboTax as well since I had to file taxes. I’m also deducting an X for 2017 and won’t use a pro (who pretty much just enters numbers into a pro version of tax software) unless I REALLY have to.
With a simple return (1 w2 and a random deduction here or there) you statement is accurate.
As a tax accountant I can assure you that your statement is not accurate when you get into the nuances of the tax code. I would certainly recommend consulting a professional if you are getting into claiming a mixed use vehicle on a schedule C. If you choose to continue with the turbo tax option I recommend that you put the tax you saved into a savings acct plus a 75% civil penalty for 5 years in case you are audited. If you are audited it is highly likely that defense of the tax position over 5 years of business use will be difficult to substantiate. If you sell the vehicle within the 5 years you may find yourself in the hole as well once you have to reclaim that depreciation.
Thanks so much for your thoughts! Actually, paid a tax attorney to advise on the purchase. I’m a solo practitioner consultant with clients all over town. Home-based. Drive to clients almost every day and barely use the car for other (personal) things. Took delivery at the very end of 2017, kept my other (personal) car, and drove the Tesla just twice, both to visit clients (including from delivery center). I didn’t touch the car until Jan 2018, giving me 100% business use in 2017. And for 2018 and beyond, I’ll definitely keep it above 50% business use. No doubt. And miles are documented on a day to day basis (date, miles driven, origin, destination). We have a Model S (non business vehicle) that we use for “personal” like road trips, shopping etc.
Anything I’m missing?
It's the convenience of not having to input all my details, I've been using TurboTax for almost 15 years now.
Anyways, after talking to the TurboTax CPA (great service BTW), and spending over an hour, they promised to research and respond. Here's what I received:
Dear XXXXX,
Thank you for contacting TurboTax Support.
As we discussed during our call, you had a question regarding to your business vehicle deduction. Utilizing our smartlook screenshare, we were able to look at your screen and look at your entry. However, we could not resolve your issue during our call, and I told you that we would call back.
If you placed a heavy vehicle into service in 2017, you can get a 50% first-year bonus depreciation. There is $25,000 limitation applies. Refer the following IRS publication 960, page 20.
https://www.irs.gov/pub/irs-pdf/p946.pdf
After we ended our call, my manager found the following article from Tesla Motor Club. It explains how to calculate Section 179 Deduction based on $100,000 Tesla.
Time running out for Model X 2017 *massive* business-use tax deduction
The manager and I worked on your case after our call. Created the same entry in our end, and tried to bring up the depreciation.
After two hours we worked on the depreciation, we came to the conclusion that our program was not able to bring up the 179 deduction properly. The matter was out of scope for our program and will probably be included in our 2019 version.
We apologize that we are unable to resolve your issue.
Dear XXXXX,
Thank you for contacting TurboTax Support.
As we discussed during our call, you had a question regarding to your business vehicle deduction. Utilizing our smartlook screenshare, we were able to look at your screen and look at your entry. However, we could not resolve your issue during our call, and I told you that we would call back.
If you placed a heavy vehicle into service in 2017, you can get a 50% first-year bonus depreciation. There is $25,000 limitation applies. Refer the following IRS publication 960, page 20.
https://www.irs.gov/pub/irs-pdf/p946.pdf
After we ended our call, my manager found the following article from Tesla Motor Club. It explains how to calculate Section 179 Deduction based on $100,000 Tesla.
Time running out for Model X 2017 *massive* business-use tax deduction
The manager and I worked on your case after our call. Created the same entry in our end, and tried to bring up the depreciation.
After two hours we worked on the depreciation, we came to the conclusion that our program was not able to bring up the 179 deduction properly. The matter was out of scope for our program and will probably be included in our 2019 version.
We apologize that we are unable to resolve your issue.
Shoot. Serious?! TT can’t do 179?! Anyone having this same issue?
Moreover, he wasn’t totally right because there’s 100% bonus depreciation after September per the new Trump tax bill.
Makes no sense that it would be missing. People have used that feature for a long time I thought. No?
No, Turbo Tax can do the regular sec 179 deduction per the old rules, it's just chocking on the new 100% bonus depreciation rule starting 9/27/17. I think very few folks would take advantage of it in 2017, because the tax bill became law only in late Dec 2017.
Well, it retroactively cover 25% of 2017, so that seems like decent chunk of people.
To the problem at hand, if this gets entered on a worksheet that is not part of the filed paperwork, rather thanmanually editing the form, can you put the car down twice with 50% depreciation both times?
Seems like a CPO or other used X would now qualify and deduction would be a total of 50k?? Please comment
Looking at Vehicle Depreciation and Expensing under the New Tax Law | Center for Agricultural Law and Taxation
Looking at Vehicle Depreciation and Expensing under the New Tax Law | Center for Agricultural Law and Taxation
When my X arrives, I also wont have any problems documenting well over 50% business use. However, for much of that business use, my clients will pay me gas mileage as I invoice site trips. Anyone know does this mileage reimbursement lower *eligible* business use in the eyes of the IRS?
TiA.
You can't use the IRS mileage rate and depreciate a vehicle. You can only claim actual expenses (non-free charging) if you are depreciating the vehicle (pass through expense). This is due to the mileage rate including wear and tear (per mile depreciation).
For kicks, I ran a quick calculation. Ignoring financing, registration, sales tax, and tires while factoring in the 7,500 tax credit on a leather/PUP X100D, driving 135 miles a day for work (expensed at IRS rates with free supercharging) will cover the cost of the car without needing to deal with depreciation or residuals, making personal use a non-issue.
$0.545 * 135 miles/day * 20/days a month * 12 months/year * 6 years = 105948 + 7,500 = 113,448.
I need a longer commute (with home office) to more places...
$0.545 * 135 miles/day * 20/days a month * 12 months/year * 6 years = 105948 + 7,500 = 113,448.
I need a longer commute (with home office) to more places...
BrokerDon
Active Member
Correct... but totally unnecessary to hire a tax professional to do you tax return for just one tax filing "trick". I pay our company's CPA / attorney as a "coach" to help with a couple of tricky tax return questions I run into every year for our 2 partnership, 2 LLC, 1 corporation and 1 personal tax returns I file using TurboTax Business and TurboTax Premier annually. No need to hire him to do our entire tax return just for a couple of input assists.
You many also be able to get an answer from one of the TurboTax professionals by signing up for their annual TurboTax renewal program.
My question is different. I am not looking to use the IRS mileage rate. Instead, I am trying to figure my applicable percentage business use. What I am wondering is, assuming that my business use is over 50% in raw numbers, but if some part of my business use is reimbursed by a client (actually, a state government entity) who pays me on a mileage basis, does the IRS then discount these miles for the purposes of determining whether my business miles are 50% or more of my total miles? Or is the fact that I am reimbursed by others for these business miles not relevant?
Good question. Report that reimbursement as income and not as a mileage deduction and you’re OK.
