Looking for some info

[Hi Ho]

My dad is self employed. He is his only empoyee. I don't know how to describe the work other than a general carpenter. Anyway, he needs a truck for his work. He has one. However, it is old (in my signature... don't ask why it says "my truck" It's not technically mine), gets horrible gas milage, and with over 460,000 miles on it costly problems are starting to crop up. He would love a newer truck but while he makes good money it isn't enough for him to afford a newer, more efficient, and reliable truck. Now I have heard a lot about the "SUV tax break" and while it seems the SUV loophole has been patched I think it might be a good option. However, I have no idea how it works. My dad has been thinking about it but hasn't looked into it much. The tax break is for small business owners that use a vehicle at least 50% of the time for work. My dad uses it much more than 50% work. What I don't get is how this break works. If my dad were to get a $25,000 to $30,000 truck it would be possible to get all or most of that money deducted from taxes (right?). How would it work? He doesn't pay $30,000 in taxes every year. Would it be spread out over a couple years or is he out of luck in that regard. Would he only be able to deduct as much as he pays in taxes? I have been unable to find any info on this and I would appreciate it if anyone could explain it. Thanks.

[edfair]

Do a google search for "suv tax credit". You'll get more informed info from those sites than just about anywhere.

Basically a tax credit. Can be used to offset tax due. But does he need a 6000 pound truck selling in the $50,000 range or would he be better off with something more driveable and more affordable?

If he is creative in his accounting it seems likely he won't have much tax to shield. The mileage expenses should pay for the truck.

[Hi Ho]

He needs an F-250 sized truck. He could get by with an F-150 but there is no diesel engine available. The F-250 is covered under that tax break. It's really not an SUV tax break anymore. That was a loophole that has been plugged. I have Googled it but my questions haven't been answered. He would be very happy with an F-250 XLT CrewCab W/ Powerstroke diesel. He just can't afford it. That old truck certainly has paid for itself but now it's becoming more expensive to maintain than it is worth. It isn't drivable right now because the breaks have practicly stopped working.

[flanzig1]

Look for a used truck in the two year old range. Might be able to find a good truck driven by some urban cowboy that hasn't been used and abused.

[Jaggannath]

Best way to find out about tax is to talk to an accountant... if it turns out to be cheaper for him, the $10-30 he might spend for a half hour explanation of what he needs to do could be some of the best money he spends

[rjfvillarosa]

Hi Ho the tax year is coming to an end soon can he wait and get some advice from whom ever submits his tax return for him?? In the mean time I will ask my wife, she does the returns for her family's business via an accountant (who is a family friend) and she can speak to him for me. Everyone down here on the island runs a truck and I am sure the tax laws cannot be that much different here than they are on the mainland.

[glc]

Can he afford to lease a new truck? Lease payments for a business asset are deductible, and will be less than standard payments if he bought one outright. As already stated, talk to an accountant.

[rjfvillarosa]

Originally Posted by glc

Can he afford to lease a new truck? Lease payments for a business asset are deductible, and will be less than standard payments if he bought one outright. As already stated, talk to an accountant.

Hi Ho I spoke to my wife and she said pretty much the same as glc says, the only difference here is with the SUV loophole instead of closing it they raised the state purchase tax on that vehicle only, effectively cancelling the loop hole out.

[Hi Ho]

Thanks for all the advice. I guess I should tell him to talk to an accountant.