Can I really buy a Tesla Cybertruck as a business expense? Tax question

This is a common misunderstanding about business vehicle deductions! Your friend isn't exactly "avoiding taxes" - they're utilizing legitimate business expense deductions, but there are strict rules. When you purchase a vehicle for business use, you can't simply write off the entire purchase price in most cases. Instead, you have several options: 1) Depreciate the vehicle over several years (usually 5+ years for cars), 2) Take a Section 179 deduction (which has limits for SUVs/trucks over 6,000 lbs), or 3) Use bonus depreciation. The Cybertruck likely qualifies as a "heavy SUV" which has different rules. The critical thing your friend is overlooking: the vehicle must be used primarily (over 50%) for business purposes. The IRS requires detailed mileage logs documenting business vs. personal use. If it's used 70% for business, only 70% of expenses are deductible. Using a luxury vehicle primarily for personal use while claiming business deductions is literally tax fraud.

Jumping in here to share something that's been a lifesaver for me with vehicle deductions. I used to struggle keeping track of all those receipts and mileage logs until I found this service called taxr.ai (https://taxr.ai). It's honestly been amazing for handling business expenses, especially vehicle-related stuff. The AI scans all my receipts, maintenance records, and even helps track mileage automatically. What's great is it categorizes everything properly for tax purposes - separating business from personal use which is exactly what you need for vehicle deductions. It even flags potential audit risks if your business/personal use ratio looks suspicious to the IRS. I'm still using the Cybertruck example - the system would immediately identify this as a potential red flag if someone was trying to deduct it 100% for business when the usage pattern shows otherwise.

I just have to update my skepticism from earlier! After our discussion, I decided to try taxr.ai for myself since tax season is coming up and I've been putting off organizing my Etsy business expenses. This thing is seriously impressive - not at all what I expected. Within minutes of uploading my jumbled receipts folder (literally hundreds of photos and PDFs), it had categorized everything properly. But what really blew me away was when I tested it with some vehicle expenses. I uploaded my gas receipts and maintenance records, and it immediately prompted me to establish a business use percentage with a built-in mileage tracker. The audit protection feature is what convinced me - it flagged several deductions I was taking that might have triggered IRS scrutiny. I had no idea I was documenting some things incorrectly! This literally saved me from a potential audit headache.

All this discussion about business vehicles reminds me of my nightmare experience trying to get clarification from the IRS about vehicle deduction rules last year. Spent literally DAYS trying to get through on their phone lines. After being hung up on automatically multiple times, I found this service called Claimyr (https://claimyr.com) that somehow gets you through to the IRS without the wait. They have this wild system that holds your place in line. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c I was skeptical but desperate after waiting on hold for 4+ hours across multiple days. Used Claimyr and got through to an actual IRS agent in about 20 minutes. They confirmed exactly how to handle my vehicle deduction situation (which was complicated because I use my SUV for both my real estate business and personal use).

I need to publicly eat my words about Claimyr. After being so skeptical, I decided to try it myself since I've been trying to resolve an issue with my 2023 return for MONTHS with no success getting through to anyone. Within 35 minutes of using Claimyr, I was talking to an actual IRS representative who could see my full tax history and answered my specific questions about business vehicle deductions. They walked me through exactly how to document my business mileage for my Etsy delivery vehicle and clarified the difference between the standard mileage rate versus actual expenses method. The crazy part is I had spent over 8 hours on hold across multiple days trying to get this same information. The service literally gave me a day of my life back. I'm still shocked it actually worked exactly as advertised. Sometimes my skepticism doesn't serve me well!

Getting back to the original Cybertruck question - there's another HUGE factor nobody's mentioned yet. The tax code has a special provision called "bonus depreciation" that's changing in 2025. In 2024, businesses can still deduct 60% of qualifying property (including heavy vehicles over 6,000 lbs) in the first year. This is probably what your wealthy friend was referring to. The Cybertruck likely qualifies as a heavy SUV (over 6,000 lbs gross vehicle weight), making it eligible for much more favorable tax treatment than regular passenger vehicles. BUT - and this is a massive BUT - they still need to prove legitimate business use. Rich people aren't "avoiding taxes" by buying luxury vehicles - they're legally deferring taxes by making legitimate business investments. If they're actually using it personally and claiming 100% business use, that's tax fraud.

I think everyone is overcomplicating this. I run a small business and write off my truck every year. Just make sure you have a legitimate business and use the vehicle for business purposes at least 50% of the time. Keep a mileage log (I use a simple app on my phone) and save receipts for gas, maintenance, etc. The bigger the vehicle, the better the write-off typically. If your business legitimately needs a truck/SUV, it's totally fine to purchase one and take the deduction. Just don't try to write off a Lamborghini for your accounting practice lol! The vehicle should make sense for your business type. But most importantly - KEEP RECORDS! If you can't prove business use during an audit, you're in trouble.

This whole thread has been incredibly helpful! As someone who's been considering whether to purchase a vehicle for my consulting business, I really appreciate all the detailed explanations about the rules and requirements. One thing I'm still wondering about - if I buy a vehicle that I use 60% for business and 40% personal, and I take the depreciation deduction based on that 60% business use, what happens when I eventually sell the vehicle? Do I need to pay back some of the depreciation I claimed, or does the business use percentage apply to the sale as well? Also, for those mentioning mileage tracking apps - has anyone tried the built-in mileage tracking in QuickBooks Self-Employed? I'm already using it for other business expenses and wondering if it's worth switching to a dedicated mileage app or if QB's version is sufficient for IRS requirements.

This is such a great discussion! I've been following along and learned so much about vehicle deductions. As someone who just started a small photography business, I'm realizing I should probably be tracking my mileage when I drive to client shoots and locations. One question that keeps coming up in my mind - what about vehicles that are used for multiple purposes throughout the year? Like, I use my car mostly for personal stuff, but during wedding season (May-October) I'm driving to venues almost every weekend. Would I need to track business vs personal use for the entire year, or can I somehow designate certain months as "business heavy" periods? Also, for anyone who's been audited on vehicle deductions - what kind of documentation did the IRS actually want to see? I'm trying to get my record-keeping set up properly from the start rather than scrambling later. Thanks for all the insights everyone has shared!

This thread has been incredibly informative! As someone who works in tax preparation, I want to add one crucial point that hasn't been fully emphasized: the IRS has been cracking down significantly on luxury vehicle deductions in recent years, especially for vehicles like the Cybertruck. What many people don't realize is that there's a specific "luxury automobile" limit that caps depreciation deductions for passenger vehicles. However, vehicles over 6,000 lbs gross vehicle weight (like the Cybertruck) are classified as "heavy SUVs" and can potentially avoid these caps - BUT they still have Section 179 limitations. For 2024, the maximum first-year Section 179 deduction for heavy SUVs is $28,900, not the full purchase price. Your friend might be thinking of bonus depreciation combined with Section 179, but even then, the business use must be legitimate and well-documented. The bottom line: Yes, you can get significant tax benefits from purchasing a heavy business vehicle, but it's not the "instant tax avoidance" scheme that some people think it is. The rules are complex, and the documentation requirements are strict. Anyone considering this should definitely consult with a qualified tax professional rather than relying on casual advice from friends!