JaCoby Marston, CPA
- Chief Financial Officer at Shopper Approved
- Greater Salt Lake City Area
- Certifications: CPA License
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JaCoby Marston, CPAParticipant4 months, 2 weeks ago
It is possible to be able to write off that much in depreciation for the first year. I recommend talking with your accountant to make sure that your car is depreciating correctly.
There are two ways you can deduct business car expenses- actual costs or mileage. Most of my clients do mileage because it usually out weighs the actual costs. Actual costs are depreciation, fuel costs, repair and maintenance costs, etc.
If you choose to do actual costs and depreciate the value of your vehicle, you have to remember that when you sell that vehicle in the future you will have to see if there is any taxable gains on the sale of the vehicle. For example, if you sale your vehicle for $10,000, you originally paid $30,000 for it and recognized $25,000 in depreciation for the life of owning the car. You are now subject to a $5,000 gain on the sale.