So, tax deduction can allow you to buy the car of your dreams, for free. Of course, you have to do this in a smart and legal way to successfully pull this off. One of the great tips we can share with you is to buy a car that weighs more than 6,000 pounds because you can rent it 100% in the first year. Now we don’t know you, but it sounds like a lot of pounds. So we decided to do some research and look at some of the cars that could be purchased with a certain amount of tax deduction. Before we dive into the details, let us quickly explain what car tax deductions are.
What is a Vehicle Tax Cancellation?
So, if you run a business or you are self-employed, then the corporate tax return toronto code is set up in a way that allows you to record out of business car expenses and prices. There are two ways:
- You have the standard mileage rate deduction, which calculates how many business miles you have driven and gives you the deduction accordingly.
- You can then deduct the actual expense, which allows you to write off the direct costs of the vehicle, including depreciation.
Write off a car using the Section 179 vehicle tax credit
Now, if you want to get your vehicle for free, then you want to take advantage of accelerated depreciation through section 179 of the tax code. Accelerated depreciation basically lets you accelerate expected losses faster, which can help in a year when you’re earning a lot of income. For example, let’s say you purchased a van for $50,000. With normal depreciation, you would deduct about $10,000 per year for 5 years. Well, with accelerated depreciation, you can take $50,000 and accelerate the loss in the first year. Accelerated depreciation is powerful because you can eliminate taxable income and buy a car without paying any taxes on the income. That means you can basically get your car tax-free, which for some is more than 40% off. One requirement for accelerated depreciation now for vehicle tax credits is that the vehicle must weigh more than 6,000 pounds. And that Tesla Model X Gross Vehicle Weight needs to be the GVWR or Gross Vehicle Weight Rating, which is the maximum loaded weight of your vehicle, passengers and cargo.
So if you have a business and you need a car for the business and you need more deductions, then in general you have to take advantage of the vehicle tax deduction. So this is an overview of vehicle tax deductions, but if you want to dig a little deeper Then checks out this post on how to write down your dream car. Now let’s take a look at the 2021 list of vehicles that weigh more than 6,000 pounds and are eligible for the vehicle tax deduction in Section 179.
Vehicles subject to Article 179 vehicle tax deduction
2021 Tesla Model X
We personally love this car! If you are like us, use your car tax deduction as strategically as possible. As such, a 2021 Tesla Model X vehicle has a GVWR (gross vehicle weight rating) of 6,788 to 6,878 pounds, which means it’s easily eligible for accelerated vehicle depreciation. Its MSRP starts at $79,990, and now you can of course upgrade it. However, if we just use the MSRP, this car could give you a tax deduction of about $79,990 if you use it for commercial purposes. We’ve seen some You Tubers use this car for business, so you should definitely check it out.
2021 Mercedes-Benz G-Class
This is also known as G wagon. It is also a very popular car, often mentioned in a lot of pop and hip hop music. So, the 2021 G wagon GVWR weighs between 6,945 and 7,056 pounds. Again, the criteria for Tesla Model X Section 179 are easily met. This car, if accelerated, will give you an estimated $131,750 in write-offs in the first year. It’s still crazy to think about. We’ve seen influencers like Grant Carden roaming around in G cars, and we’d be willing to bet they’re using the vehicle tax deduction.
2021 Porsche Cayenne
We all know the prestige that comes with the Porsche name. You think about luxury. The Porsche Cayenne barely hits the GVWR 6,329 to 6,471-pound mark. Perhaps, as a result, its MSRP is significantly cheaper than the other two’s MSRP of $67,500, with an accelerated write-off of $67,500 in the first year of ownership.
