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Well I confirmed with my accountant today that the interior cargo bed length must be 6' to write offf for section 179 on taxes. The crewmax, even with its 7000 GVWR, will not qualify do to the 5.5' bed!!!!!
UGH!!!!
Lariat supercrew with 6.5' bed here I come!!!!!!:)
 

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What is the deal with that. I thought this was based strictly on weight. I am just curious as my boss bought a Nissan Armada at the end of 2004 and was able to write off the entire purchase for 2004 due to its size and it is not even a truck. I am prett sure it can't be any longer than a Crewmax??
 

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Well I confirmed with my accountant today that the interior cargo bed length must be 6' to write offf for section 179 on taxes. The crewmax, even with its 7000 GVWR, will not qualify do to the 5.5' bed!!!!!
Ummm... That's not entirely true. You can still take the section 179 on the Crewmax, but only to a maximum of $25,000. I'm paying $31,750 for my Crewmax and claiming 80% company usage. That comes to $25400, so I'll be right at the $25k limit.

If the bed was 6' or longer, you could claim over $100k. Yowza!
 

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Ummm... That's not entirely true. You can still take the section 179 on the Crewmax, but only to a maximum of $25,000. I'm paying $31,750 for my Crewmax and claiming 80% company usage. That comes to $25400, so I'll be right at the $25k limit.

If the bed was 6' or longer, you could claim over $100k. Yowza!

"Congress imposed a reduced $25,000 limit on Section 179 deductions for heavy SUVs. This restriction applies only to SUVs put to business use after October 22, 2004.Not to worry! The idea of buying a heavy SUV still works quite well. Why? Because the tax law allows you to claim the $25,000 Section 179 writeoff plus the "regular" first-year depreciation writeoff. For example, say you spend $60,000 in 2007 to buy a new Cadillac Escalade that is used 100% in your business. You can generally claim the following first-year deductions on your business's 2007 federal return: the $25,000 Section 179 writeoff plus $7,000 worth of regular depreciation [20% x ($60,000 - $25,000)]. So your first-year depreciation deductions add up to $32,000, or about 53% of the new Escalade's cost.

he full Section 179 deduction ($112,000 for tax years beginning in 2007; $108,000 for 2006) is still available for heavy business vehicles that are not considered to be SUVs under the tax law. Both new and used vehicles can qualify for this important exception. Non-SUVs include:

· Vehicles with a cargo area of at least six feet in interior length that's not easily accessible directly from the passenger compartment. For example, many pickups with full-sized beds will fit this description. Beware: some "quad cab" and "extended cab" pickups may have cargo beds that are too short to qualify.

· Vehicles designed to seat more than nine passengers behind the driver's seat. For example, many hotel shuttle vans will fit this description.

· Vehicles with: (1) a fully enclosed driver's compartment and cargo area, (2) no seating behind the driver's seat, and (3) no body section protruding more than 30 inches ahead of the leading edge of the windshield. This sounds weird, but many delivery vans will meet this description.
Bottom Line: Heavy vehicles that fall under these three exceptions remain eligible for the full Section 179 writeoff ($112,000 for tax years beginning in 2007; $108,000 for 2006). That means you can probably deduct the full business portion of your heavy non-SUV's cost in Year One. Sweet!
The catch? Only that your newly acquired vehicle must be used more than 50% of the time for business purposes. But as I'll explain below, setting up a business office in your home can give you a big leg up in meeting this requirement. Before we get to that key point, however, here's a little more background so you'll understand how the Section 179 break works in this context.
First, Pick Out a Suitably Heavy Machine
The Section 179 deduction is available only when your SUV, pickup or van has a manufacturer's gross vehicle weight rating (GVWR) above 6,000 pounds.
" - from the smart money article
 

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I can see where it appears somewhat hazy, but the crewmax should qualify for the "Heavy SUV" category but not the "Heavy Non-SUV" which can get you $112k this year in deductions.

For example, in 2005 the Honda Ridgeline qualified for section 179, and it only had a 5' bed. The Dodge Dakota Quad Cab did as well with only a 5.3' bed. Check out the following:

SUV TAX DEDUCTION LIST

I think we'll be fine, but you did give me a scare. :)
 

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That site is dated (2005 tax year). I think the new bed-length determination came out just after that.
 

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Nah.. It's cool. Unless the law changed for 2007, we're just capped at $25k. I know it was legitimate for 2006. The law changed October 23rd of 2004 with the bed length issue. I posted the list from 2005 to show an example of a 6000+ vehicle with a shorter than 6' bed being eligable for the $25k deduction AFTER the law change. If the bed on the crewmax was over 6', we could deduct up to $112k, but since it's just 5.5', we can only go to $25k.
 

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Oh. Okay. My bad. As a rule my CPA will have final official say.
 

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I know what you mean. Fortunately for me, I married one. :)

Unfortunately, however, before she became a stay at home mom she only did large corporate accounting and actually knows very little about small business. Since our business is an S Corporation, she's always having to look info up on us lesser entities. :D
 

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My accountant told me instead of writing off the truck in whole, the mileage deduction was a better deal. He said at 30,000 miles a year, I can deduct (what is it, .41 cents a mile???) $12,300 each year. In two years, that would pay for the truck, and every year thereafter would continue to be a writeoff.

Are you not permitted to write off the mileage if you use the section 179 rule, even after the truck is fully depreciated?
 

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My accountant has been telling me for years to use the mileage reimbursement in lieu of the depreciation (even accelerated schedule), and I do.

If you keep your vehicles after you have paid for them, use mileage reimbursement, and drive a good amount on actual business then it can be a good deal. I generally drive at least 20k a year on business and all of that is reimbursed back to me at 48.5 cents/mile in 2007. Last year it was 44.5 cents/mile. After your vehicle is paid in full, then you could conceivably generate around $9,000/year towards a down payment. You also get the offset during the years you are paying the vehicle off.

So, if you buy a vehicle that could last at least 150,000 miles and paid it off in 5 years then you would generate approx. $23,000 (pre-expenses) the last 2.5 years for the down-payment on the next vehicle. I'm not an accountant and am not giving financial advice nor tax advice. Check with yours for your situation.
Your mileage may vary so to speak;)
 

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The $25,000 expensing limit applies to any 4-wheeled vehicle which is primarily designed or can be used to carry passengers on public streets, roads, and highways and has a GVWR of no more than 6,000 pounds but not more than 14,000 pounds.

A vehicle is NOT subject to the $25,000 expensing limit if it:
1. is designed for more than nine individuals in seating rearward of the driver's seat.
2. is equiped with an open cargo area, or a covered box not readily accessible from the passenger compartment, of at least six feet in interior length, or
3. has an intergral inclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.

I also recommend you use the standard mileage rate (44.5 cents per mile in 2006, 48.5 for 2007) instead of actual expenses (which includes depreciation). The standard mileage rate method is NOT available if the auto is used for hire (taxi) or for 5 or more autos used simultaneously, such as fleet operations. The depreciation component of the standard mileage rate is .17 for 2006 (.19 for 2007) and it reduces the bases of the vehicle for gain or loss purposes.
 

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Exactly. Now to sum it up for those that have been overwhelmed by the tax talk on this forum:

The Crewmax *CAN* be used as a section 179 deduction up to, but no more than, $25,000.
 

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Exactly. Now to sum it up for those that have been overwhelmed by the tax talk on this forum:

The Crewmax *CAN* be used as a section 179 deduction up to, but no more than, $25,000.
If one drives, say 17,500 miles a year, then taking the mileage deduction this year of .485 cents would amount to a write off of $8487.50. In three years, that amounts to $25,462.50 in todays dollars.

Wouldn't it be foolish to not take the mileage deduction over the 179 deduction if you plan on keeping the vehicle for at least 3 years?
 

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Discussion Starter #17
I dont know and I am debating this right now.
25k up front plus all GAS costs, as well as maintenance...
or
49cents per mile plus depreciation?

With gas going up, who knows if that writing that off will be more valuable in 3 years, unless the mileage credit rises from 49cents/mile upwards...

i plan on keeping the car at least 4-5 years and putting 100k plus miles on it...

thoughts?
 

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Reimbursement rates are going up each year but in the last two years we have witnessed some serious increases.

Look at it like this, you get 25K now and maybe $5250 a year (assumes 18K miles a year and 12 MPG average/year, 3.5 dollars AVG cost gas) that equals 5.556 years. So, 25,000 + 5.556 (5250) equals $54200.

The same using mileage reimbursement and an average 4 cent increase over five years from today's 48.5 (for an average lifetime reimbursement rate of 58.5 cents/mile) equals 100,000 *58.5 or 58,500.

Obviously there are no guarantees on increases in mileage rates going up 4 cents a year on average over the life of your situation. This scenario gets better the more miles you drive (up to a point) and correspondingly gets worse initially the first years if you drive less. Other factors are gas prices. Fact is, its easy to make the model and run it yourself, even with a simple calculator. With a little linear programming in EXCEL we could maximize.....ummm I think I'll quit right there.

There are other things to plug in or add to it for your situation and expectations.

The cool thing is that this reimbursement can take place on any vehicle. Even those that get 35+ MPG. Now, where's that truck that tows 10,000 lbs+ and gets 35 MPG+:D
 

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If one drives, say 17,500 miles a year, then taking the mileage deduction this year of .485 cents would amount to a write off of $8487.50. In three years, that amounts to $25,462.50 in todays dollars.

Wouldn't it be foolish to not take the mileage deduction over the 179 deduction if you plan on keeping the vehicle for at least 3 years?
Possibly, but not necessarily. There are far more factors to consider than just mileage vs. a section 179 deduction. You have fuel costs, maintenance, insurance, and miscellaneous things like camper tops, etc. As well, you have the immediate tax benefit of the 179 deduction. With a $25k deduction, I'll pay about $10k less in taxes for 2007. In three years my business can (on average) turn $10k into over $21k. And I can have that advantage even if I put 1000 miles on my truck per year. Since I put about 10-12 thousand miles per year on my business vehicle, this works out far better for me.

By ABSOLUTELY no means am I claiming either way is better for everyone. It depends on all those factors. My post was just simply to answer the question that started this thread.
 

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The Tundra CrewMax has a 5.5' box. Toyota offers a "bed extender" that adds 2' of enclosed capacity. With that the CrewMax clearly has a 7.5' bed. Is there any reason why that would not meet IRS rules to qualify for a full deduction of the vehicle cost in year 1?

Taking that one step further, think about a pickup truck with a 7.5' flat bed. How different is that from a pickup with a 5.5' box, its 2' tailgate is down? Doesn't every CrewMax with a 5.5' box actually have a 7.5' bed?
 
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