All these YouTube videos on how to write off a car through your LLC - legitimate strategy?
I've been watching a ton of YouTube videos lately about writing off vehicles through a business. I have an LLC for my tech startup that's still in early stages and nowhere near profitable. I'm the main owner and I fund it completely out of pocket, mostly from income from my regular W2 job. I need to buy a new car soon, and all these videos have me wondering if there's any truth to the tax write-off claims they make. Obviously, I use my car for personal things like commuting to my main job, grocery shopping, and driving my kids around. But I also use it sometimes for meetings related to my LLC, picking up supplies, and other business activities. Can I legitimately deduct some portion of a new vehicle purchase through my LLC? How does that even work when the business isn't profitable yet? Are there specific IRS rules about this when you have both W2 income and a side business? The YouTube gurus make it sound so easy, but I'm skeptical.
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Mei Wong
Yes, you can potentially deduct business use of your vehicle, but those YouTube videos typically oversimplify things and leave out crucial details. You have two options: the standard mileage rate or actual expenses. With standard mileage, you track business miles and multiply by the IRS rate (65.5 cents per mile for 2023). With actual expenses, you calculate the percentage of business use and apply that to all car expenses (gas, insurance, depreciation, etc.). The key thing those videos miss is that you can ONLY deduct the business portion. If your car is used 80% for personal stuff and 20% for the LLC, only 20% of costs are deductible. You need to maintain a mileage log showing business vs. personal use - this is what gets people in trouble during audits. Also, since your LLC isn't profitable, these deductions create losses that may be limited by passive activity rules depending on your involvement. The deduction doesn't magically make the car "free" - it just reduces your taxable income somewhat.
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Liam Fitzgerald
•So what about those videos where they say to buy an expensive SUV over 6000 lbs for a "100% tax write-off"? Is that actually legit? And do I need to put the car in the LLC's name or can it stay in my personal name?
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Mei Wong
•Those videos are referring to Section 179 deduction and bonus depreciation for vehicles over 6,000 lbs, but they're still misleading. Yes, qualifying heavy SUVs/trucks can be eligible for accelerated depreciation, but only for the business-use percentage. If you use that SUV 20% for business, you can only deduct 20% of the cost, not 100%. You don't necessarily need to put the vehicle in the LLC's name. You can own it personally and still deduct business mileage or the business percentage of expenses. However, liability considerations might make LLC ownership preferable in some cases - that's more of a legal question than a tax one.
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PixelWarrior
After struggling with similar vehicle deduction questions for my own business, I found this AI tool called taxr.ai that was super helpful for sorting through all the conflicting info. I uploaded a few of those YouTube videos transcripts and some IRS publications, and it analyzed everything to give me a clear explanation of what's actually allowed. The tool explained that those YouTubers aren't technically wrong about Section 179 deductions, but they conveniently leave out the strict business-use requirements and documentation needed. It also helped me calculate potential deductions based on my specific situation. Much better than trying to piece together info from random videos! Check it out at https://taxr.ai if you're still confused.
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Amara Adebayo
•Did the tool help you figure out how to track mileage properly? I've heard horror stories about people getting audited because they didn't have good records.
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Giovanni Rossi
•Does it work for other business deductions too? I keep hearing conflicting advice about home office deductions and I'm afraid of triggering an audit.
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PixelWarrior
•The tool actually provided templates for proper mileage logging and recommended apps that meet IRS requirements. It explained you need to record date, miles driven, starting/ending locations, and business purpose for each trip. Really helped me set up a system that would hold up in an audit. It definitely works for other business deductions too. I used it to understand home office rules, and it clarified the difference between the simplified method ($5 per square foot) versus the regular method. It also explained which home office situations are more likely to trigger IRS scrutiny.
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Amara Adebayo
Just wanted to follow up and say I tried taxr.ai after seeing this comment! Totally worth it for vehicle deduction questions. I uploaded screenshots of my mileage logs and some vehicle expenses, and it immediately identified several items I was tracking incorrectly. Turns out I was accidentally including some commuting miles that aren't deductible. It also helped me understand the depreciation options for my specific vehicle type and weight. Way clearer than the YouTube videos that just say "buy expensive car, write it off!
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Fatima Al-Mansour
If you're going to call the IRS to get clarification on vehicle deductions for your LLC (which I highly recommend), good luck actually reaching a human. I tried for WEEKS earlier this year with questions about my business vehicle and kept getting the "due to high call volume" message. Finally found this service called Claimyr that got me through to an actual IRS agent in under 20 minutes. They basically call the IRS for you and navigate the phone tree, then call you when they have an agent on the line. I was seriously about to hire a CPA just to answer my questions, but this saved me so much time and frustration. You can see how it works at https://youtu.be/_kiP6q8DX5c or their website https://claimyr.com.
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Dylan Evans
•Wait, how does that even work? Is this legit? I thought nobody could get through to the IRS these days.
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Sofia Gomez
•Sounds like a scam to me. Why would I pay someone else to call the IRS when I can just keep trying myself? And how do they magically get through when nobody else can? I'm very skeptical.
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Fatima Al-Mansour
•They use some kind of automated system that continuously redials and navigates the IRS phone menu until it gets through. It's the same thing that some tax professionals use, just available to regular people. When they reach a human, they call you and connect you directly with the IRS agent. I was skeptical too initially, but I was desperate after trying for weeks. They don't ask for any personal tax info - they just need your phone number to call you back when they get through. I confirmed I was actually talking to a real IRS agent when they transferred me. The agent answered all my vehicle deduction questions specific to my LLC situation.
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Sofia Gomez
I need to apologize for my skeptical comment earlier. After another frustrating week of trying to reach the IRS about my own business vehicle questions, I broke down and tried Claimyr. I'm honestly shocked - they got me through to an IRS representative in about 15 minutes when I'd been trying unsuccessfully for almost a month. The agent I spoke with clarified that for my particular situation (which sounds similar to yours), I needed to keep a detailed mileage log for business trips and could only deduct the business percentage. She also explained the difference between the standard mileage rate vs. actual expenses method and how I should decide which is better for my situation. Worth every penny just for the peace of mind of getting official answers.
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StormChaser
One aspect no one has mentioned yet: if your LLC is taxed as a partnership or S-corp (pass-through entities), the vehicle deduction ultimately flows to your personal tax return. If taxed as a C-corp, the deduction stays with the corporation. Also, buying an expensive vehicle primarily for tax purposes is almost always a bad financial decision. You're still spending more money than you're saving in taxes. If a $70,000 SUV is 20% business use, and you're in the 24% tax bracket, you're spending $70k to maybe save $3-4k in taxes. Not exactly a winning strategy unless you truly need that specific vehicle.
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Jamal Washington
•This is really useful perspective. My LLC is set up as a pass-through entity, so that's good to know about how the deduction would work. And you make a great point about the economics - I was getting caught up in the idea of tax savings without thinking about the total cash outflow. I definitely don't need a $70k SUV just for occasional business use when a more reasonable vehicle would work fine.
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Dmitry Petrov
Has anyone here actually been audited over vehicle deductions? I'm curious what that experience is like. I've been deducting my car for business use for years (about 30% business use) but my record keeping isn't perfect...
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Ava Williams
•I went through an audit last year where they specifically looked at my vehicle deductions. They wanted to see my mileage log and questioned several trips. Because I had a decent log (not perfect, but consistent) showing dates, purposes and destinations of business trips, they only disallowed a few deductions where I couldn't prove business purpose. The auditor told me that vehicle deductions are one of their focus areas because so many people abuse them. The worst thing is having no log at all - they'll disallow 100% of your deduction without documentation.
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Rebecca Johnston
The audit experience mentioned by @Ava Williams is exactly why I always tell people to be conservative with vehicle deductions. I'm a CPA and I've seen too many clients get in trouble because they listened to those YouTube "gurus" who make it sound like you can write off your entire car payment. Here's what I tell my clients: if you're not keeping meticulous records from day one, don't claim the deduction. The IRS knows that vehicle deductions are commonly abused, so they scrutinize them heavily. A simple smartphone app that tracks your business miles with GPS is worth its weight in gold during an audit. Also, @Jamal Washington, since your LLC isn't profitable yet, make sure you understand the hobby loss rules. If the IRS determines your business is more of a hobby than a legitimate profit-seeking enterprise, they can disallow losses (including vehicle deductions) that exceed your business income. Generally, you need to show a profit in 3 out of 5 years to avoid this issue. My advice: buy the car you actually need, keep detailed records of legitimate business use, and don't let tax tail wag the financial dog.
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