If we use Section 179 deduction on one truck and Bonus deduction on another vehicle, can we also write off loan interest on both? What about expenses like fuel and maintenance? The truck is used 100% for business, the car 80%. Thanks for helping us sort this out.
In short, yes. You can deduct interest on the loans for the truck and the other vehicle, as well as gasoline, repairs, insurance, and any other costs to own and operate the two vehicles. The underlying reason is that both the Section 179 deduction and bonus depreciation require the use of the actual method of deducting vehicle expenses (as compared to taking the standard mileage rate). So since you are already using the actual expense method, you are eligible to add in all the other actual costs for owning and operating the vehicles. 100% of truck expenses will be deductible, since the truck is used 100% for business. 80% of expenses for the other vehicle are deductible, consistent with the business use percentage for that vehicle.
Hope this helps!
William Perez, EA
Staff writer for tax and accounting, FitSmallBusiness.com
Thanks so much for your reply, William. It made sense to me that this could be done but I wanted to make absolutely certain before I give the numbers to our CPA.
This is a tremendous help!
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