Sorry if this is a dumb question… but if I wrap my car and keep a mileage log, is it then 100% tax deductible? Can every mile be logged since every mile is advertising? Thanks.
It does not matter if a car is wrapped or not. The only thing that matters is the purpose of the trip. If the car is driven to a location for a business purpose, the mileage is deductible. If the car is driven to a location for non-business purposes, the mileage is not deductible - regardless of whether the vehicle is wrapped or not.
If your car is wrapped then every trip is for business purposes. Roll down your window and ask the person next to you to write the number and website on your truck when you reach your destination then it just became a business trip. Damn let's help each other a bit. I hate the hate keeper attitude.
I'm wrapping my car through Carvertise and advertising a third party's business. They say I am an independent contractor and will receive a 1099. Can I deduct any part of my commute even though it is not my business I am advertising?
Unfortunately, the IRS will still treat this as a personal trip, because it is commuting: www.irs.gov/publications/p463#en_US_2023_publink100033913:~:text=customer%20or%20client.-,Advertising%20display%20on%20car,-.%20Putting%20display
Okay, thank you for this information, but my question is slightly different. What if I am getting paid to advertise by mile for another company? Like signing up for rap if I have one of those companies that wraps your car with another company's logos and then pays you for the miles you drive? Then every mile is literally you working for it right?
That is correct - if you are being paid for each mile you drive, you would recognize income for the amount you are paid and then deduct the mileage associated with the income.
Say I wanted to go on a road trip to somewhere but wanted to be able to log the miles for business; Could I just sell a product to someone at that location and log it as business use?
That could be possible. The tax rules look at the primary purpose of the trip. Is the primary purpose to sell a product or is it for something else? Do you normally deliver your products in person or do you normally ship them? It also depends on your product. If you drive 500 miles to deliver a something that would be cheaper to send via mail, the IRS will likely question the purpose of your trip as more personal rather than business.
Buy the vehicle under a separate business. Charge yourself advertising fees for the vehicle as an advertising medium. Write of those fees. As long as the fees are reasonable....? Business that owns the vehicle writes it off as 100% business expense no matter where it is going or why? Guess the question is, how does it compare to a billboard?
If you charge your business advertising fees, the business can deduct it, but you still have to recognize the income. A business cannot deduct an expense that is not picked up as income somewhere else.
I am all the way in South Africa but your tax teaching is universal. Thanks so much! I hope you're well, I am eagerly awaiting a new video from you...
Thanks so much! We are work on some new videos right now.
Sorry if this is a dumb question… but if I wrap my car and keep a mileage log, is it then 100% tax deductible? Can every mile be logged since every mile is advertising? Thanks.
It does not matter if a car is wrapped or not. The only thing that matters is the purpose of the trip. If the car is driven to a location for a business purpose, the mileage is deductible. If the car is driven to a location for non-business purposes, the mileage is not deductible - regardless of whether the vehicle is wrapped or not.
If your car is wrapped then every trip is for business purposes. Roll down your window and ask the person next to you to write the number and website on your truck when you reach your destination then it just became a business trip. Damn let's help each other a bit. I hate the hate keeper attitude.
I'm wrapping my car through Carvertise and advertising a third party's business. They say I am an independent contractor and will receive a 1099. Can I deduct any part of my commute even though it is not my business I am advertising?
Unfortunately, the IRS will still treat this as a personal trip, because it is commuting: www.irs.gov/publications/p463#en_US_2023_publink100033913:~:text=customer%20or%20client.-,Advertising%20display%20on%20car,-.%20Putting%20display
Okay, thank you for this information, but my question is slightly different. What if I am getting paid to advertise by mile for another company? Like signing up for rap if I have one of those companies that wraps your car with another company's logos and then pays you for the miles you drive? Then every mile is literally you working for it right?
That is correct - if you are being paid for each mile you drive, you would recognize income for the amount you are paid and then deduct the mileage associated with the income.
Man I'm going to use the question about CPAs wrapping their cars now😅
Ok No big deal… keep a mileage log. Advertising is very important
Say I wanted to go on a road trip to somewhere but wanted to be able to log the miles for business; Could I just sell a product to someone at that location and log it as business use?
That could be possible. The tax rules look at the primary purpose of the trip. Is the primary purpose to sell a product or is it for something else? Do you normally deliver your products in person or do you normally ship them?
It also depends on your product. If you drive 500 miles to deliver a something that would be cheaper to send via mail, the IRS will likely question the purpose of your trip as more personal rather than business.
Buy the vehicle under a separate business. Charge yourself advertising fees for the vehicle as an advertising medium. Write of those fees. As long as the fees are reasonable....? Business that owns the vehicle writes it off as 100% business expense no matter where it is going or why?
Guess the question is, how does it compare to a billboard?
If you charge your business advertising fees, the business can deduct it, but you still have to recognize the income. A business cannot deduct an expense that is not picked up as income somewhere else.
Great video!!!!
Thanks Rue!