It’s important to remember that this “loophole” doesn’t actually save the business taxes in the long run. The deduction is accelerated to year 1, so you have higher taxable income thereafter. In a way, you could think of it as the government giving you an interest free loan on your taxes, giving your business a little more cash flow for the first year. Naturally, none of this is tax or business advice for anyone reading this comment since I don’t know your specific situation. Get a CPA who can look at your situation and specific details.
Most business owners almost always lease instead of buy. This loop hole works for leased vehicles as well. It's easier to deduct the taxes on a leased vehicle, it allows you to always keep a new vehicle in your rotation, and you don't have to worry about headaches with maintaining a high mileage vehicle. Let's not forget that it benefits manufacturers when business owners lease their vehicles, as it keeps those year-on-year sales growth numbers on target.
this is so untrue. if you owe 45 k to the IRS and instead buy your buiness a 45k truck. you no longer owe that 45k to the irs, im not sure what you are talking about. it 100 percnet saves taxes in the short and long run. very strange comment.
+1 on “untrue”…this isn’t how a tax deduction works. It’s no form of loan. It’s literally lowering the taxable income by the deduction amount…you “deduct” the expense from taxable income. So, let’s say you have 500k of taxable income, and 150k worth of deductions. Your taxable income is now 350k and the normal bracketed taxes apply to that. You can also get fancy with depreciating assets like real estate or probably the vehicles too, including “accelerated depreciation” which again rich folk use to their advantage all the time.
The other thing this made me realize is that when Retrumplican politicians grandstand against any tax incentives for electric vehicles they never mention that this tax incentive exists and causes worse problems. Hmm, does raise questions about their selective outrage.
@@MrGoodachespicking a tribe doesn’t make a difference. They are both in on it. This tax break existed when we had 8 years of Obama and 4 years of Biden. If it were that bad they would’ve removed it but they too benefited from it
@@MrGoodachesOur outrage is giving tax money to prop up a commodity that struggles to survive or exist in a free market w/out gov subsidies. My tax money now goes to the truck manufacturers, not ev giveaways or the pres family's bus country.
@@MrGoodachesThis tax break has been on the books for 40 years through an equal number of democratic and republican administrations. So they are equally responsible for this mess .
My coworker bought property back when it was cheap in the 80s and 90s. Now he is a slum lord. He has a property management company and a landscaping business. All his family have nice cars with fuel cards. I don’t pretend to understand how. Until now.
That's actually admirable. You and him were at the same position at one point and now he is a multimillionaire with multiple properties and streams of income.
Um, except that has nothing to do with this, at all. They have nice cars because he makes lots of money by owning two companies and apparently also works another job with you. Also, this video was highly misleading, as it doesn't effect the total deductions for a business at all in the long run, it only effects the timing of those deductions, so it doesn't really explain anything anyway.
Add to your comment another exemption for fuel efficiency which applies to low weight vehicles but not to 6000 lbs & above. This also assisted vehicle manufacturers to meet the EPA mandate fuel efficiency for their total production in the US. Unintended consequences.
When I started an ecommerce business selling on eBay and Amazon at the end of 2017, I bought a brand new $40K Ram quad cab 4x4 pickup truck for business use. It proved to be a fantastic tax deduction; especially, since the business was a pass though entity on my joint income tax return.
@@MuzixMaker and I was able to reduce our federal income tax liability by taking the biz vehicle deduction. So, end the end, yes, I paid for the truck, but after the generous tax incentive paid less in taxes and effectively paid much less for the truck than the $40k price.
@@MuzixMakeryes but he paid way less in taxes which effectively reduced the cost of his truck by around 60% in the 1st year. He still deducted the balance from his gross income in subsequent years
Tax codes are meant to be utilized, it makes no sense to limit the deduction value, if anything, uncap it and allow for deductions on lighter vehicles in addition to it so business owners have more options to provide jobs for their community.
Actually the full price can be deducted of all vehicles, just for most vehicles you slowly deduct the value over the "life" of the vehicle. The only limit is how much you can deduct each year, unless you sell an asset before the end of it's "life".
You are missing the part where this scheme saves you nothing it just provides some kind of instant gratification.. But it is that shifr of perception which makes the trend. So yes it is important to reframe it.
@@absolutiumThe deductions actually do save you money assuming the saved taxes make a vehicle you buy cost you less than one you needed to buy. Getting the write off up front means you can reinvest that money quickly. Also, there’s other trickery involved at the tail end.
@@nunyabidness3075 I described the situation by the events happening the most which is promoting a trend of consumption due to people having little to no insight into the process.. You did it by describing the event which happens the least.. which is doing it for the purpose of having early liquidity to use for further earnings.. which is by itself another exception..
@@nunyabidness3075 ..since we know credit is the way of businesses further investment. Yes we all want that extra money sooner but you could still have it by buying a 20k car instead of promoting 90k trucks.
*There is no such thing as a “tax loophole”. It’s called the current tax code. Are millions of working Americans who pay no taxes at all using “tax loopholes”? It’s just a derogatory term used by taxpayers who don’t qualify for a particular deduction. *Tax breaks and tax deductions don’t cost the government a penny. But government spending costs Americans trillions.
FYI "Light Section 179 vehicles Any vehicle with a manufacturer’s gross vehicle weight rating (GVWR) under 6,000 pounds (3 tons). This includes many passenger cars, crossover SUVs, and small utility trucks. For 2023, these autos have a Section 179 tax deduction limit of $12,200 in the first year they are used. In fact, if the extra $8,000 of Bonus Depreciation is also factored in, you can deduct up to a combined maximum of $20,200 for 2023. Heavy Section 179 vehicles Any vehicle with at least 6,000 pounds GVWR but no more than 14,000 pounds (3 to 7 tons). This includes many full-size SUVs, commercial vans, and pickup trucks. For 2023, a vehicle qualifying in the “heavy” category has a Section 179 tax deduction limit of $28,900. However, these autos are eligible for 100% bonus depreciation through the end of 2022. Starting in 2023, the allowable bonus depreciation percentage will decrease to 80%. "
GREAT video! Awesome job on your background research!! As a side note: you should seriously get involved in voice acting, narration, etc. Your vocal chords can make you some great money. Congratulations and best wishes!!!
This loophole hasn’t cost the government anything. Taxes are taken from individuals that earned that money. So all that’s done is limited the pool of money of which government can use wastefully and fraudulently. I would like to see you do a report over government discretionary spending. Everybody likes to focus on our budget for the military, but why don’t we just eliminate the discretionary spending and allow Americans to keep that money?
Fantastic video. I am a small business owner that drives one of these behemoths for the tax credit. Would have preferred a smaller vehicle. Ended up buying a small commuter car on my own for daily use. I generally knew this story, but you told it really well. My preference would be to get rid of the 6000lb gross weight limit.
Just for cost & deduction comparisons over the year- In 2023, my Yukon cost $87,000 (we use it to transport for our funeral home). In 2000, my first SUV was a Ford Expedition and I think it cost me around $35,000 (at that time it was not a business expense because racing motocross was a hobby).
Not really a loophole, by depreciating the vehicle immediately they are unable to write off mileage and maintenance on them. When they sell, donate or trade them they have to pay a gain for any value they get over a dollar.
You're wrong about writing off mileage. Doesn't matter if you pay $1 for a car, or $100K and write it all off the first year. Either way, you get your IRS mileage money deduction, a simple amount per mile intended to cover operating expenses, not purchase or depreciation. On the mileage deduction, it is Prius owners who basically save enough in taxes to cover their car payments and make the car essentially free.
you are def not a CPA, all wrong info. you can write off all mileage and maintence no matter if you buy it in cash or finance it. also when you sell or trade it... you get another one and write that off... im not sure where youre getting your info from
I think the answer is to lower the weight limit. There are many businesses, especially small businesses, that could use minivans quite efficiently, while having better fuel efficiency and still giving people options for tax breaks. And it would still stimulate the economy through vehicle purchases.
Next, show how they sdtopped producing mid sizw pickups, (super popular and desired/ Rangers0 AND how there is a smog exemption for "work trucks" vehicles .. even though these are used for passenger purposes. Are they super polluters compared to passenger vehicles?
Yeah, it's not really a "loop-hole", and it actually doesn't change how much of a deduction businesses can take on a vehicle; the only thing it does is allow them to take more deduction in the first year versus over a few years. So the only real difference is if a business owner has an extra great year and wants to deduct more this year and less the next few years; because they don't think they will do just as well the next few years again. I don't know any business owner who has ever thought that way though. Also, since it doesn't actually change the amount of deduction a business can actually make total, it doesn't actually reduce the tax revenue of the government, it is just delaying it till the next year.
You can definitely structure revenue and expenses to post breakeven on 1 yr to the next. An ez way to do this is non perishable durable business supplies you are 1000% gonna use. You could absolutely load up with 6 months supply just before your fiscal year ends and push your expenses up to erase most of your "profit". Then next year, you buy a Yukon XL SUV to offset that extra profit 😎
Is a 6000 pound SUV really a better buy with the tax write off, when you figure the additional price, depreciation, interest payments, sales tax, higher insurance, dealer up sales and you really don’t need a $90,000 car? NO! Often people like having the biggest, and newest, sparkling toy. Rather than live below their means and invest their money wisely. If you invest the money properly. Your investments will pay for your toys in time.
I've got a full-size SUV for my business. It's the only thing that fits all my equipment and my kids while also being a capable enough off-road vehicle to go to the remote places I work.
One of my sisters was an Executive Sales Manager for AM General I don't know what she made, I just know she was in photo shoots, traveled around the world selling them to military.
I almost did this when I started my computer consulting business. I was going to get a fully loaded Toyota Tundra which came in at 6050lbs if I remember right. In the end I didn’t want to pay $60,000 for a truck.
Well my daughter-in-law runs a business, but they also have 5 boys under 16, So, they actually have two SUV’s, sometimes they need to take both to a sporting event.
He didn’t discuss the cost of Insurance when you purchase an expensive vehicle and insure it as a commercial vehicle. It starts to eat into that tax break very fast.
My guess the loophole is Not going away because auto lobbyists keep the loophole afloat to subsidize sales that would be meager or a loss if the incentive was removed.
Bro I drive my Nissan Armada for safety here on these Florida roads. I convince my wife to get rid of her Honda accord and get a Nissan Armada after she got rear ended when she was pregnant.
Not sure I understand the premise of this video. Deducting business expenses is fair and reasonable. In fact, it's absolutely crucial to business success, and eventually leads to increased tax collection in the form of income taxes, corporate taxes and sales taxes.
You’re able to claim a tax deduction for driving your business car. Self-employed individuals can claim a deduction on the cost of owning and operating a “business vehicle.” Expenses and costs deductible are Gas, Oil, Insurance, Tires and other wear-and-tear items, Registration fees, Licenses, and Depreciation (or lease payments).
2:37 apparently i missed the boat in 1984 when you could use the section 179 deduction to write off a delorean time machine flux capacitor limited edition suv
It's called amortization vs full cost write off.. one time write off vs multi... amortization. In accounting, tax amortization benefit (or tax amortisation benefit) refers to the present value of income tax savings resulting from the tax deduction generated by the amortization of an intangible asset.
The Largest producer of C02 emissions is commercial airlines , Military air planes (like the C130 globe master, Military auto transports & Tanks, also coal & gas fire power plants, Privately owned vehicles all over the world only account for 20% of all C02 emissions, the next time you have a chance watch a 747 take off and see how much C02 it produces. What do you think. ??? Thanks
C130 is Hercules, a 4-propeller plane. You're thinking of the C17. A 747 carries a lot of people a long distance, so you have to compare it to driving 400 cars carrying 1.25 people apiece to compare apples to apples. It does better than a big SUV then, despite going 10x the average speed. Airlines fill up airliners pretty well. Business owners of oversized SUVs drive 95% of their business miles alone.
@@EfficientRVer I stand corrected thank you. So it is the C130 Hercules & the C17 Globe master. they both look so similar that is how I got them mixed up. Got it Thanks
We need to *eliminate federal taxation.* We're *supposed* to be funding our own republics (states & counties), not the endless list of federal agencies, dep'ts, & corporate partners in D.C.
It makes sense to incentivize investing in work equipment and yes, at some point 6000 lbs vehicles were in fact work trucks (or similar) rather than passenger cars. Incentivizing passenger cars makes little sense as they barely provide economic development/growth, but as outlined many meet the criteria for qualifying as what was meant to be work vehicles. I’m all for low taxation, but effective taxation needs to be based on proper tax legislation and all this section 179 business isn’t really up to date anymore.
Some places in the world rather disincentivize growth and development in order to preserve land for existing residents to enjoy, notably rich home owners who want to keep their neighborhood the way it is.
Question. Is the C02 study from the SUV C02 from USA alone or worldwide? Because that would make a big difference. If it’s worldwide honestly that’s not a big deal. What that study does show me is that china will be the end of the world
no longer behemoths with big heavy battery packs... Look at the highlander hybrid, the honda pilot and countelss others for normal family cars that are over 6k pounds..
It doesn’t cost the government anything. Stop thinking the government is owed our money. That money is the result of our labor and hard work. The government needs to better manage the money they have.
Let’s see - the us govt wants us to drive fuel efficient vehicles but gives a huge tax credit if we buy the car with the worst gas mileage. Makes sense. I’ve done this 3 times 😅
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Could this be why trucks now cost over 100k?. As in drove up the price of cars
Could this be why truck prices up to and over 100k. As in drove truck prices higher
What if cars had electric baterys that push their weight to 6000 punds
Great job, can you do a segment about prop 13 in California and how people abuse it?
Great job, can you do a segment about prop 13 in California and how people abuse it?
This sounds like an explanation for $100k truck/suv price tags.
Why make affordable cars for poor people when you can make luxury cars for rich people?
but there are people who actually paid $100k for their truck without any tax benefit. RIP their bank account.
@@monkeyrunthat’s their problem
@@BlitzkriegOmegaactual rich people want nothing to do with these monstrosities
@@BlitzkriegOmegamost rich people do not purchase expensive vehicles.
It’s important to remember that this “loophole” doesn’t actually save the business taxes in the long run. The deduction is accelerated to year 1, so you have higher taxable income thereafter. In a way, you could think of it as the government giving you an interest free loan on your taxes, giving your business a little more cash flow for the first year. Naturally, none of this is tax or business advice for anyone reading this comment since I don’t know your specific situation. Get a CPA who can look at your situation and specific details.
What if you purchase a new truck every year?
@@Ed-ym4tuyou would get slaughtered on depreciation
Most business owners almost always lease instead of buy. This loop hole works for leased vehicles as well. It's easier to deduct the taxes on a leased vehicle, it allows you to always keep a new vehicle in your rotation, and you don't have to worry about headaches with maintaining a high mileage vehicle. Let's not forget that it benefits manufacturers when business owners lease their vehicles, as it keeps those year-on-year sales growth numbers on target.
this is so untrue. if you owe 45 k to the IRS and instead buy your buiness a 45k truck. you no longer owe that 45k to the irs, im not sure what you are talking about. it 100 percnet saves taxes in the short and long run. very strange comment.
+1 on “untrue”…this isn’t how a tax deduction works. It’s no form of loan. It’s literally lowering the taxable income by the deduction amount…you “deduct” the expense from taxable income. So, let’s say you have 500k of taxable income, and 150k worth of deductions. Your taxable income is now 350k and the normal bracketed taxes apply to that. You can also get fancy with depreciating assets like real estate or probably the vehicles too, including “accelerated depreciation” which again rich folk use to their advantage all the time.
Ugh - I wasted my money on an efficient minivan! I'm getting a Suburban next!
The Pacifica minivan gross weight is over 6,000 lbs.. Yours might qualify
Why the F?
I think most minivans Gvwr is heavy enough to qualify.
But you poor asf😂
@@Thompson_HPacifica curb weight- 4,521 to 4,883 lbs depending on model.
-- Ok, so, now it makes sense to go purchase a big luxury suv for my hot dog stand.
Don't forget that fuel, maintenance and all out of pocket repairs get written off on taxes as part of business expenses.
The production value is out of this world. Subscribing and catching up on your other videos.
Soooo, automakers, some more than others, are essentially being propped up heavily by a nonsensical tax loophole. Cool. That explains a lot.
Only thing nonsensical is the weight restriction. lol
The other thing this made me realize is that when Retrumplican politicians grandstand against any tax incentives for electric vehicles they never mention that this tax incentive exists and causes worse problems. Hmm, does raise questions about their selective outrage.
@@MrGoodachespicking a tribe doesn’t make a difference. They are both in on it. This tax break existed when we had 8 years of Obama and 4 years of Biden. If it were that bad they would’ve removed it but they too benefited from it
@@MrGoodachesOur outrage is giving tax money to prop up a commodity that struggles to survive or exist in a free market w/out gov subsidies. My tax money now goes to the truck manufacturers, not ev giveaways or the pres family's bus country.
@@MrGoodachesThis tax break has been on the books for 40 years through an equal number of democratic and republican administrations. So they are equally responsible for this mess .
"Costing the Government billions?"
Taxpayers keeping more of their money isn't a cost.
Government spending has always been the problem.
This was a very well put together video, props to you my guy.
great video, hope more people find your channel
My coworker bought property back when it was cheap in the 80s and 90s. Now he is a slum lord. He has a property management company and a landscaping business. All his family have nice cars with fuel cards. I don’t pretend to understand how. Until now.
Now you know his cars are used over 50% of the time for business purposes
That's actually admirable. You and him were at the same position at one point and now he is a multimillionaire with multiple properties and streams of income.
@@vivalacarlo you right. My bad for not starting an investment portfolio of real estate when I was 3.
lol I’m 40 years younger than him.
@@moroteseoinage lol still were in the same position at one point
Um, except that has nothing to do with this, at all. They have nice cars because he makes lots of money by owning two companies and apparently also works another job with you. Also, this video was highly misleading, as it doesn't effect the total deductions for a business at all in the long run, it only effects the timing of those deductions, so it doesn't really explain anything anyway.
Add to your comment another exemption for fuel efficiency which applies to low weight vehicles but not to 6000 lbs & above. This also assisted vehicle manufacturers to meet the EPA mandate fuel efficiency for their total production in the US. Unintended consequences.
but SUVs and trucks are not under any new EPA regulations only passenger cars are
When I started an ecommerce business selling on eBay and Amazon at the end of 2017, I bought a brand new $40K Ram quad cab 4x4 pickup truck for business use. It proved to be a fantastic tax deduction; especially, since the business was a pass though entity on my joint income tax return.
You still had to pay for the truck.
@@MuzixMaker and I was able to reduce our federal income tax liability by taking the biz vehicle deduction. So, end the end, yes, I paid for the truck, but after the generous tax incentive paid less in taxes and effectively paid much less for the truck than the $40k price.
@@MuzixMakeryes but he paid way less in taxes which effectively reduced the cost of his truck by around 60% in the 1st year. He still deducted the balance from his gross income in subsequent years
@@obieWanmotivation your math ain't matching buddy.
Tax codes are meant to be utilized, it makes no sense to limit the deduction value, if anything, uncap it and allow for deductions on lighter vehicles in addition to it so business owners have more options to provide jobs for their community.
Actually the full price can be deducted of all vehicles, just for most vehicles you slowly deduct the value over the "life" of the vehicle. The only limit is how much you can deduct each year, unless you sell an asset before the end of it's "life".
You are missing the part where this scheme saves you nothing it just provides some kind of instant gratification..
But it is that shifr of perception which makes the trend.
So yes it is important to reframe it.
@@absolutiumThe deductions actually do save you money assuming the saved taxes make a vehicle you buy cost you less than one you needed to buy. Getting the write off up front means you can reinvest that money quickly. Also, there’s other trickery involved at the tail end.
@@nunyabidness3075 I described the situation by the events happening the most which is promoting a trend of consumption due to people having little to no insight into the process..
You did it by describing the event which happens the least.. which is doing it for the purpose of having early liquidity to use for further earnings.. which is by itself another exception..
@@nunyabidness3075 ..since we know credit is the way of businesses further investment.
Yes we all want that extra money sooner but you could still have it by buying a 20k car instead of promoting 90k trucks.
*There is no such thing as a “tax loophole”. It’s called the current tax code. Are millions of working Americans who pay no taxes at all using “tax loopholes”? It’s just a derogatory term used by taxpayers who don’t qualify for a particular deduction.
*Tax breaks and tax deductions don’t cost the government a penny. But government spending costs Americans trillions.
Eye-opening. Thank you.
Thanks for the info, just subscribed!
Bro i just want to say you have a great voice.
Super interesting! Well done presentation!
This a very detailed and easily understandable explanation of section 179! Great work and thank you!
This was incredible! Thank you!
FYI
"Light Section 179 vehicles
Any vehicle with a manufacturer’s gross vehicle weight rating (GVWR) under 6,000 pounds (3 tons).
This includes many passenger cars, crossover SUVs, and small utility trucks.
For 2023, these autos have a Section 179 tax deduction limit of $12,200 in the first year they are used. In fact, if the extra $8,000 of Bonus Depreciation is also factored in, you can deduct up to a combined maximum of $20,200 for 2023.
Heavy Section 179 vehicles
Any vehicle with at least 6,000 pounds GVWR but no more than 14,000 pounds (3 to 7 tons).
This includes many full-size SUVs, commercial vans, and pickup trucks.
For 2023, a vehicle qualifying in the “heavy” category has a Section 179 tax deduction limit of $28,900. However, these autos are eligible for 100% bonus depreciation through the end of 2022. Starting in 2023, the allowable bonus depreciation percentage will decrease to 80%. "
GR8
Informative
Video,
ThankYou
CB
This sort of content, while informational, usually bores me but not in this case. You have a great presentation style!
GREAT video! Awesome job on your background research!! As a side note: you should seriously get involved in voice acting, narration, etc. Your vocal chords can make you some great money. Congratulations and best wishes!!!
Outstanding job !! Keep it up
This loophole hasn’t cost the government anything. Taxes are taken from individuals that earned that money. So all that’s done is limited the pool of money of which government can use wastefully and fraudulently. I would like to see you do a report over government discretionary spending. Everybody likes to focus on our budget for the military, but why don’t we just eliminate the discretionary spending and allow Americans to keep that money?
Absolutely correct.
Discretionary spending is just a BS term all spending is discretionary
Fantastic video. I am a small business owner that drives one of these behemoths for the tax credit. Would have preferred a smaller vehicle. Ended up buying a small commuter car on my own for daily use. I generally knew this story, but you told it really well. My preference would be to get rid of the 6000lb gross weight limit.
Great video. Nice work.
Excellent video, articulate to the point. I wonder if that happens here in Canada
How much time did it take to edit this video?!? Very well done. Wow.
Great information! Thanks for sharing.
The 1 correction is that the vehicle must have a GVWR of 6000 or more pounds. As such, there are also large sedans that meet that threshold.
Great content and explanation.
Just for cost & deduction comparisons over the year- In 2023, my Yukon cost $87,000 (we use it to transport for our funeral home). In 2000, my first SUV was a Ford Expedition and I think it cost me around $35,000 (at that time it was not a business expense because racing motocross was a hobby).
Back in the day, a Suburban was called a truck-based station wagon.
It is interesting this makes people drive much larger vehicles than they normally would burning much more gas.
Great Video. Thanks
Great analysis!
You, sir, are a genius!
Not really a loophole, by depreciating the vehicle immediately they are unable to write off mileage and maintenance on them. When they sell, donate or trade them they have to pay a gain for any value they get over a dollar.
You're wrong about writing off mileage. Doesn't matter if you pay $1 for a car, or $100K and write it all off the first year. Either way, you get your IRS mileage money deduction, a simple amount per mile intended to cover operating expenses, not purchase or depreciation. On the mileage deduction, it is Prius owners who basically save enough in taxes to cover their car payments and make the car essentially free.
you are def not a CPA, all wrong info. you can write off all mileage and maintence no matter if you buy it in cash or finance it. also when you sell or trade it... you get another one and write that off... im not sure where youre getting your info from
@@aceyohan1217 section 179,
Great presentation!
I think the answer is to lower the weight limit. There are many businesses, especially small businesses, that could use minivans quite efficiently, while having better fuel efficiency and still giving people options for tax breaks. And it would still stimulate the economy through vehicle purchases.
Great research!
Thanks for the tip! I:ll see if there's a similar loophole in my country.
Next, show how they sdtopped producing mid sizw pickups, (super popular and desired/ Rangers0 AND how there is a smog exemption for "work trucks" vehicles .. even though these are used for passenger purposes. Are they super polluters compared to passenger vehicles?
Yeah, it's not really a "loop-hole", and it actually doesn't change how much of a deduction businesses can take on a vehicle; the only thing it does is allow them to take more deduction in the first year versus over a few years. So the only real difference is if a business owner has an extra great year and wants to deduct more this year and less the next few years; because they don't think they will do just as well the next few years again. I don't know any business owner who has ever thought that way though. Also, since it doesn't actually change the amount of deduction a business can actually make total, it doesn't actually reduce the tax revenue of the government, it is just delaying it till the next year.
You can definitely structure revenue and expenses to post breakeven on 1 yr to the next.
An ez way to do this is non perishable durable business supplies you are 1000% gonna use. You could absolutely load up with 6 months supply just before your fiscal year ends and push your expenses up to erase most of your "profit".
Then next year, you buy a Yukon XL SUV to offset that extra profit 😎
Is a 6000 pound SUV really a better buy with the tax write off, when you figure the additional price, depreciation, interest payments, sales tax, higher insurance, dealer up sales and you really don’t need a $90,000 car? NO!
Often people like having the biggest, and newest, sparkling toy. Rather than live below their means and invest their money wisely. If you invest the money properly. Your investments will pay for your toys in time.
All investments don't profit somebody has to lose 💯 so it's a risk without reward at times when most just want the reward
@@STLWILDONE While I do agree with a lot of the other comment, you're 100% right
@@STLWILDONE yes they do if you invest in the s and p 500 index - stock market always goes up
I've got a full-size SUV for my business. It's the only thing that fits all my equipment and my kids while also being a capable enough off-road vehicle to go to the remote places I work.
dont forget that business dont pay what regular people pay. Buying from fleet is always cheaper than sales
Thanks for the educational information
One of my sisters was an Executive Sales Manager for AM General I don't know what she made, I just know she was in photo shoots, traveled around the world selling them to military.
Was that James Earl Jones VO on a hummer commercial?
This is all to help the UAW.
The Hustle is just that.
I almost did this when I started my computer consulting business. I was going to get a fully loaded Toyota Tundra which came in at 6050lbs if I remember right. In the end I didn’t want to pay $60,000 for a truck.
excellent, Does canada have the same deduction?
Lol I'm actually looking for a full size SUV right now. How does it work when you lease?
Great research and history story behind it, thank you!
Like, sub, bell (c)
Well my daughter-in-law runs a business, but they also have 5 boys under 16, So, they actually have two SUV’s, sometimes they need to take both to a sporting event.
Terrific Video !....Thank you , I just sub'd your Channel ....
He didn’t discuss the cost of Insurance when you purchase an expensive vehicle and insure it as a commercial vehicle. It starts to eat into that tax break very fast.
I'm a wealthy real estate entrepreneur... I ride a $10,000 dollar mountain bike around....
I bet it's a nice bike, but you can't write it off unless it weighs over 6,000LB! LOL.
It really cost $69.99 from Walmart. The other $9k & change came from beefing it up to hold the 5,972 lb diesel-engine-tax-write off-kit. True story.
Does this apply for Cybertruck???😅😊😊😮
My guess the loophole is Not going away because auto lobbyists keep the loophole afloat to subsidize sales that would be meager or a loss if the incentive was removed.
I learned something new that was acually informative.
Liked and subscribed.
So THAT'S who's helping the SUV apocalypse!
Is this loophole only for new vehicles? Or could one buy a used Tesla Model X for example, this would be a great vehicle for ubering.
Bro I drive my Nissan Armada for safety here on these Florida roads. I convince my wife to get rid of her Honda accord and get a Nissan Armada after she got rear ended when she was pregnant.
Not sure I understand the premise of this video. Deducting business expenses is fair and reasonable. In fact, it's absolutely crucial to business success, and eventually leads to increased tax collection in the form of income taxes, corporate taxes and sales taxes.
You’re able to claim a tax deduction for driving your business car. Self-employed individuals can claim a deduction on the cost of owning and operating a “business vehicle.”
Expenses and costs deductible are Gas, Oil, Insurance, Tires and other wear-and-tear items, Registration fees, Licenses, and Depreciation (or lease payments).
2:37 apparently i missed the boat in 1984 when you could use the section 179 deduction to write off a delorean time machine flux capacitor limited edition suv
It's called amortization vs full cost write off.. one time write off vs multi... amortization. In accounting, tax amortization benefit (or tax amortisation benefit) refers to the present value of income tax savings resulting from the tax deduction generated by the amortization of an intangible asset.
Vehicles are tangible assets so I think it is called depreciation.
Now I understand why there's so many SUVs on the road
I take the mileage deduction over depreciation.
First time on this channel… is it just me who notices the voice?
Hi! Real estate agent here. He’s not wrong 👋 🏡
The Largest producer of C02 emissions is commercial airlines , Military air planes (like the C130 globe master, Military auto transports & Tanks, also coal & gas fire power plants, Privately owned vehicles all over the world only account for 20% of all C02 emissions, the next time you have a chance watch a 747 take off and see how much C02 it produces. What do you think. ??? Thanks
C130 is Hercules, a 4-propeller plane. You're thinking of the C17. A 747 carries a lot of people a long distance, so you have to compare it to driving 400 cars carrying 1.25 people apiece to compare apples to apples. It does better than a big SUV then, despite going 10x the average speed. Airlines fill up airliners pretty well. Business owners of oversized SUVs drive 95% of their business miles alone.
@@EfficientRVer I stand corrected thank you. So it is the C130 Hercules & the C17 Globe master. they both look so similar that is how I got them mixed up. Got it Thanks
i love my 2004 tahoe. big suv in 2004. normal sized suv in 2024
@2:22 that marker is too big for your ear
We need to *eliminate federal taxation.* We're *supposed* to be funding our own republics (states & counties), not the endless list of federal agencies, dep'ts, & corporate partners in D.C.
It makes sense to incentivize investing in work equipment and yes, at some point 6000 lbs vehicles were in fact work trucks (or similar) rather than passenger cars.
Incentivizing passenger cars makes little sense as they barely provide economic development/growth, but as outlined many meet the criteria for qualifying as what was meant to be work vehicles.
I’m all for low taxation, but effective taxation needs to be based on proper tax legislation and all this section 179 business isn’t really up to date anymore.
Some places in the world rather disincentivize growth and development in order to preserve land for existing residents to enjoy, notably rich home owners who want to keep their neighborhood the way it is.
I am a business owner (CPA) who does not drive a large SUV. Why? Because I don’t want one. I can use the sec 179 deduction on other things.
apparently none of these business owners or their accountants have read IRS publication 946
Question. Is the C02 study from the SUV C02 from USA alone or worldwide? Because that would make a big difference. If it’s worldwide honestly that’s not a big deal. What that study does show me is that china will be the end of the world
I figured there was some serious tax deductions going on, but I didn't know why. Thanks!
Why is it deemed "loophole" when it is clearly written in as law? Play the game, but play it to win
no longer behemoths with big heavy battery packs... Look at the highlander hybrid, the honda pilot and countelss others for normal family cars that are over 6k pounds..
America had no income tax until 1913. We should abolish all of it and let people drive what they want without government intervention.
you don't remember how bad the air quality was in the 90s
@@hendrx Income tax has nothing to do with environmental regulations.
@@hendrx90s? That was clean compared to the 70s/60s/50s.
@@hendrx you clearly inhaled too much of that air if you think that had anything to do with income tax
@@ILoveTinfoilHats im not talking about taxes but driving without government intervention
3:45: Cherokee weighs 2800 lbs. It's bonkers how lightweight it is. I had to look it up. You should too.
Keep in mind that the national debt goes up over $8 billion dollars a DAY, so this "loss" is worthless in the grand scheme of things.
War bonds arent going to buy themselves! We need to print more money!
It doesn’t cost the government anything. Stop thinking the government is owed our money. That money is the result of our labor and hard work. The government needs to better manage the money they have.
My mom just bought a new Cadillac after wrecking her last one for the second time
Let’s see - the us govt wants us to drive fuel efficient vehicles but gives a huge tax credit if we buy the car with the worst gas mileage. Makes sense. I’ve done this 3 times 😅
My sim in the Sims 3 is a business owner and he owns one 😂😂😂
That explains why my neighbor who owns a small hair salon drives a big Cadillac SUV. 🤔
Dang...1958 sounds a lot like 2024.
where you going to find most of these (even used) for $30k, though? Or would you just be able to tax deduct max 30k of the total price?
You get to take it all, regardless. It's just a question of how much you take immediately the first year.
Is this also the case for those in Canada? Do we have any of these so called tax breaks?