Sec 179 requires a vehicle with a Gross Vehicle Weight Rating of above 6k pounds for certain restrictions.
Please make sure you continue to consult with a tax professional on the type of vehicle. Leasing cars may also be tax deductible but speak with your tax professional first.
The correct answer will always be “ask your CPA”. That said, it helps to know:
is the new truck lease also expected to be a Toyota, or another brand?
is the new business a pass-thru entity (eg a single-member LLC/LLP, S-corp)? How is it taxed?
Assuming it’s a pass-through
But if it’s something like a C-Corp, or a multi-member LLC taxed as a corporation, iirc most banks won’t allow a personal guarantor. Which is why it’s best to discuss with your accountant.
And since it’s 2021, the accelerated depreciation for Section 179 would be against your 2021 revenue, for a pass-through entity whose fiscal year is also calendar year.
Yah it’s sad that tacoma 4 door 6 feet isn’t over 6,000 lb
Tundra would qualify for full 179 it seems
However for us it would be a lease and then buy it out - and keep long term on the farm thus the slower allowable depreciation on the tacoma will suffice
Contact your CPA for your specific situation, however, I am depreciating a pre-owned Ford F-150 purchase currently and it is not in company name.
S Corp here as well. Considering it will come off the top end as an expense it shouldn’t matter if it is in company name or not.
Also, I was told that company cars should be available to all employees, meaning technically ur secretary should be able to drive your truck…u don’t want that
Also since this is a startup business, assuming you’re not at your top income yet, your CPA may suggest taking mileage, or just writing off the lease payments for the annual instead of sec 179.
I’ve expensed a % of my lease since 2008, not because of income specifically, but every time I looked at a 179 deduction (every lease cycle since) the math never made sense for me. Always in consultation with my cpa.
Not a cpa but here are things that I have done and considered:
a) Yes can register/title car in your company name
b) For a loan, a personal guarantee will still be needed
c) Commercial Insurance is higher for a car registered under corporation
d) Business Mileage works out nicely and is infinitely more flexible than section 179.
Therefore, having been there and done that, as a new business, I recommend that you keep the truck under your name and take the mileage deduction. Once you have a few years of business experience, you can then decide if 179 is good for you.
The commercial insurance is no joke. To insure my company truck under my name aon my personal insurance would have been like $80 a month. On the commercial insurance (despite only driver) it’s almost triple that.
So get some quotes and see if that’s still worth the extra cost.
