DetailAddict

iTrader: (52)

Say I want to start a business and I have a regular full-time job. It'll start off as a one man thing and it's a home business. How does the tax work?

- Is it true that I can write off the car for a certain amount every year for x number of years?
- But if I don't make any money from the first year, can I still write it off?
- If yes, I assume it's coming off of my full-time job, is that true?
- And the car has to be under company's name I assume, correct?
- Does the write off get prorated in the first year? Let say I get to write to 10k in the first year, but my business doesn't start until middle of the year and so I get to write off 5k only? (assuming the car will be used 100% for the business).

Thanks in advance!

syncopation

iTrader: (3)

Turbotax actually has most of the info you need in their FAQ:

http://www.turbotax.com/articles/Aut...essOwners.html

hope that helps.

DetailAddict

iTrader: (52)

very helpful... especially and this link too!

I haven't reading all materials... I still have question on how does it work with my regular full-time job and the first year write-off if business begins in mid year...

Thanks!

Leo

psoper

I expect you'd get to write off your business expeses against your regular job income, that's always worked for me, but realize that if the business doesn't start to turn a profit after a certain time you can't deduct the costs as it becomes a "hobbie" in the eyes of the IRS.

Especially in CA you might want to either retain a lawyer or at the very least invest in a stack of books on the subject from NOLO, as CA has some screwey laws and regs that apply to small businesses

Salty

iTrader: (14)

This is just from my experience so don't take this as solid information...

-Yes (I write off a certain amount of mileage, fuel and maintenance) Also look into a lease.

-Obviously not the money but damn near everything else regarding business expenses.

-The money from your fulltime job is different because you're already getting taxed on that with a w2, not 1099 or anything similar with a fictitious business. I think that money is a separate beast altogether. I guess it depends on a good CPA though

-My car's not (I think it depends on the type of business). I'm sure a leased car would have to be under the business name though...

-Not too sure... I won't hurt you to call a CPA for a couple quick questions. Act like a potential customer.

DetailAddict

iTrader: (52)

What about a lease?
Good idea!

DetailAddict

iTrader: (52)

Yeah, I read about that. Believe me, I do want to start making money with it. I am not trying to 'get my money back' with a 'fake' business.

What is NOLO?

ldivinag

iTrader: (3)

nolo press.

makes all sort of lawyer type books for everyone from the supreme court to you and me.

www.nolopress.com

buy an H1. use it for business, then write it off...

(note i said H1, not that POS chevy tahoe clone, the H2...)

DetailAddict

iTrader: (52)

Thanks for the info Leo! But I rather get a STi and write it off. I prefer the H1 more than the H2 myself.

Salty

iTrader: (14)

If you lease the vehicle in your company/your name it's a complete write-off IIRC. Of course you're limited to the boundaries of the lease itself (i.e. mileage etc.). Same thing happens when big companies utilize private buildings… they lease the building for a write-off , do a lease buy-back -or- pop smoke altogether.

Be careful writing off too much and not making enough money to compensate for it. Not only will you become a target for audit but it's hard to qualify for certain types of financing.

Bottom line… you need to talk to a CPA!

DetailAddict

iTrader: (52)

Wow! Do you mean if I get a car that worth 20k on a lease, I get to write off 20k? But I don't think I can do that because the business requires me to drive around A LOT!

And yes, I need to talk to a CPA, someone won't charge me just to talk.

ldivinag

iTrader: (3)

no, the magic number is that the vehicle has to have a GVW of over 6000 pounds.

last i looked, it only has 3500 and some change...