Vehicle Depreciation
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Ok, how does one go about getting the vehicle's depreciation. I have a 2007 Ford E 350 with 143,000 on it. Also on another subject, does the government reimburse you for all those little bank (comdata charges) and how much does the government reimburse you on a cell phone? (My company requires me to have one.) thanks.
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HI,
Depreciation is done two ways, you can take only one of them.
Since you are in a cargo van, you are able to take the standard mileage deduction is the total of the miles you put on each time you leave and return to your main home., But if you use your vehicle in any way for personal use, that percentage can not be taken,
your example is $143,000 miles, So you would have to take off 15-20% of the miles off and the balance is taken as a deduction times the mileage rate. it depends how it is entered in the tax software that you use. YOU CANNOT USE FUEL, INSURANCE, REPAIRS, TIRES, OR ANYTHING ELSE WHEN MILEAGE IS TAKEN PERTAINING TO THE VEHICLE,
but the other items that you spend on are deductible
The other is actual expenses on the vehicle
1. The depreciation is the Cost of the van by the date you put it in service and then taken over 3 years with a 4 year life. YOU CANNOT TAKE MILEAGE AT ALL.
2. in return you are able to take Insurance, fuel, repairs tires etc.
As far as the other items that you are questioning. There is no such thing as reimbursement, they are deductions to your income.
Bank fees are deductible and so is the cellphone, but if you use the phone for personal use of any sort, your cell phone deduction is based on the total less your personal use
%age,
So if your bill is 100 per month, and you use it 20% for personal then you can only take 80% of the total.
There are other deductions that you can take, E-mail me directly at [
[email protected]] and I will be glad to send you a deductible listing or call me at 1 704-739-4039
If this is your first year in this business, I would suggest you have a tax professional who truely knows the trucking industry to do your tax return. it is a little difficult to do it properly the first year in business if you do not know what and how to deduct the expenses and what and what you can not deduct,
At this time if you have not had them completed and you want a professional to do them for you. you will definitely have to get and apply for an extension on your return so it can be completed and filed by Oct 15, 2008. it is just an extension to file, it does not release you from interest and penalties added if any tax is owed.
Thank you for the inquiry,
Franklin Katz, ATP, PA
Franks Tax & Business Service
120 York Rd
Kings MOuntain, NC 28086
704-739-4039
