Sole proprietor tax question

[Vol8188]

For my business (food vending) I need a 4wd vehicle that can haul at least 4 people. I’m trying to research tax information about the difference in leasing vs buying and which will benefit me the most.

Any info or suggestions are appreciated

 

[hog88]

For my business (food vending) I need a 4wd vehicle that can haul at least 4 people. I’m trying to research tax information about the difference in leasing vs buying and which will benefit me the most.

Any info or suggestions are appreciated

If you lease you can write off the lease payment if you buy you can depreciate you can even use the section 179 accelerated depreciation. So basically it all boils down to what do you think you will do in revenue.

 

[Vol8188]

If you lease you can write off the lease payment if you buy you can depreciate you can even use the section 179 accelerated depreciation. So basically it all boils down to what do you think you will do in revenue.

Give me more detail on that. If my revenue is above x I should do which one and below x, which?

And how do I calculate x?

 

[marcusluvsvols]

Give me more detail on that. If my revenue is above x I should do which one and below x, which?

And how do I calculate x?

You still teaching too? Good job on the side business, rental properties, etc...we rarely see politics the same but I respect your ambition.

 

[Vol8188]

You still teaching too? Good job on the side business, rental properties, etc...we rarely see politics the same but I respect your ambition.

I appreciate that. I hate down time. Never really feel happy unless I’m working. The food vending works great because it’s mainly summers and weekends.

 

[hog88]

Give me more detail on that. If my revenue is above x I should do which one and below x, which?

And how do I calculate x?

I can’t do that. What are you using for bookkeeping? Most any program will have tax simulation.

 

[Vol8188]

I can’t do that. What are you using for bookkeeping? Most any program will have tax simulation.

Lol book keeping? I have a file cabinet full of receipts. Taxes and bookkeeping are the thing I’m trying to straighten out right now.

 

[DancingOutlaw]

For my business (food vending) I need a 4wd vehicle that can haul at least 4 people. I’m trying to research tax information about the difference in leasing vs buying and which will benefit me the most.

Any info or suggestions are appreciated

There’s a pile of rules for business vehicles- weight limits, price limits, business use percentage, etc. I do think the new law loosened the requirements on what qualifies, so that should help you. I also think it upped what you can expense in the first year, so you’d realize a lot of cash savings up front. Determining if you’ve got an operating vs. capital lease is also important. A capital lease or cash purchase will go on your books, an operating lease you will just deduct the expense. Purchase option is one element of a capital lease, but there are a few other qualifiers.

All that to say this is free advice so talk to your tax guy as well.

 

[hog88]

Lol book keeping? I have a file cabinet full of receipts. Taxes and bookkeeping are the thing I’m trying to straighten out right now.

Spend a few dollars.

As a business owner 90% of your time will be tax mitigation.

 

[vol_in_ar]

Spend a few dollars.

As a business owner 90% of your time will be tax mitigation.

isn't food vending mostly a cash business, just write off the losses

 

[Vol8188]

isn't food vending mostly a cash business, just write off the losses

About 90% but I use the square for credit and debit. You’re saying lease and just deduct the price per month from my reported profit?

 

[Roustabout]

For my business (food vending) I need a 4wd vehicle that can haul at least 4 people. I’m trying to research tax information about the difference in leasing vs buying and which will benefit me the most.

Any info or suggestions are appreciated

With the changing tax code you need to consult a CPA.
Many SUVs were good purchases if they met the 6k lb gvwr. In that case, don't lease. With the new rules, lease may be better. Just make sure you've got a good read on miles to build in.

There is a way you can work this to your advantage if you'd like to know more.

 

[Vol8188]

With the changing tax code you need to consult a CPA.
Many SUVs were good purchases if they met the 6k lb gvwr. In that case, don't lease. With the new rules, lease may be better. Just make sure you've got a good read on miles to build in.

There is a way you can work this to your advantage if you'd like to know more.

I would

 

[YankeeVol]

Easy. Don’t file taxes

 

[Roustabout]

I would

You can build in excess mileage (more than what you would use) on the lease. Yes, your payment will be higher, but depending on what you can write off, this may not be a bad thing.

This affords a much lower residual. You can buy the vehicle at the end of the lease and keep it for the business, buy it personally, or resell it for a profit.

 

[superdave1984]

How long do you plan on keeping the vehicle and how long do you plan on having the business? If this is a short term venture, you might want to go a different route than if you are going to do this for 10 years.

 

[Obsessed]

Buy...

You can decide next year if you want to use the standard vehicle deduction or actual expenses

If you have an exceptional year, take the full depreciation of the vehicle via 179

Lowers your tax burden and put more money back in your pocket.

 

[HuntinVol]

I would contact a CPA. There is a lot that can change or a lot that you won't know unless you delve into the IRS. You can get in pretty deep if the IRS starts poking around and you haven't done things correctly. With that being said though, I would buy. I don't know very much, but I know there are situations if you are only using the vehicle part time for business about how much you can depreciate, mileage, etc. I've never liked leases, I want to own whatever I have.

I am not sure if we are talking about a $20,000 vending business or $200,000 business. If we are a talking about a larger business, I would definitely contact a CPA. They can keep you out of IRS trouble and give you sound business advice.