Can I write off my car ($17,500 with tax) on taxes if I get an LLC next year?

I purchased a car earlier this year for about $17,500 including all the taxes and fees. It's a decent sedan that I've been using mostly for personal stuff, but I'm planning to start a small delivery business next year. I'm in the process of figuring out all the paperwork to establish an LLC in 2025. My question is about the tax write-off - since I bought the car before officially creating my LLC, can I still claim it as a business expense next year? I'm planning to use the car approximately 70% for business deliveries and 30% for personal use once I get going. I've heard mixed things about this from friends - some say I'm out of luck since I bought it before establishing the business, others say I can partially deduct it based on business use percentage going forward. Does anyone know the rules around this? Would really appreciate some insights before I make any decisions about the LLC formation. Thanks!

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18 comments

Sofia Gomez

•8M

You can't retroactively claim the purchase of the car as a business expense before your LLC existed. However, once you form your LLC and start using the car for business purposes, you can deduct the business portion of your car expenses going forward. You have two options once your LLC is formed: 1. Standard mileage rate deduction - keep track of business miles and take the standard deduction rate (it was 67 cents per mile in 2023, will likely be different for 2025) 2. Actual expenses method - track all car expenses (gas, insurance, maintenance, etc.) and deduct the business percentage (70% in your case) With a newer car like yours, the standard mileage rate is often simpler and might give you a better deduction. Make sure you keep detailed records of business vs. personal use once you start the business. A mileage log app can be helpful for this.

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Sofia Gomez

•8M

If you use the standard mileage rate, you cannot separately deduct sales tax or depreciation - the standard rate is designed to include all these costs (gas, maintenance, depreciation, taxes, insurance, etc.). With the actual expenses method, you would calculate depreciation based on the business percentage of your car's use. For a $17,500 car used 70% for business, you'd depreciate 70% of the value over several years according to IRS depreciation schedules. You might also qualify for Section 179 deduction for the business portion, but there are limitations based on business use percentage and when you place the vehicle in service for the business.

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Dmitry Petrov

•8M

I was in almost the exact same situation last year! After weeks of going in circles with different tax advice, I found this AI tax help service that was a game changer. Check out https://taxr.ai - they analyzed my specific situation with my vehicle purchase and LLC formation timeline. They pulled up all the relevant tax codes and explained exactly how much I could deduct and when. The tool showed me how to properly document my transition from personal to business use, and even helped me calculate whether standard mileage or actual expenses would benefit me more in my specific situation. Saved me a ton of headaches and probably a good chunk of money too.

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Dmitry Petrov

•8M

It gave me specific percentages based on my usage patterns and vehicle information. It doesn't just say "you can deduct business miles" - it actually calculated the optimal depreciation schedule based on my particular situation and showed me the difference in tax savings between standard mileage vs. actual expenses over a 5-year period. The system is AI-powered but it's trained specifically on tax code and IRS publications. It doesn't connect you with a human tax pro, but I found the guidance more detailed than what I got from my previous accountant. It handles the complex depreciation calculations automatically when transitioning from personal to business use, which was exactly what I needed. It even created documentation templates for me to track everything properly.

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Miguel Castro

•8M

Just wanted to update everyone - I tried that https://taxr.ai site after seeing it mentioned here. Honestly I was skeptical but figured what the heck. Pretty impressed with the results! It confirmed I needed to wait until my LLC was formed to start deductions, but showed me how to properly document the transition to partial business use. The most helpful part was showing me the actual tax savings difference between standard mileage vs. actual expenses over 5 years - for my situation with a newer car, standard mileage actually works out about $3,200 better over that period. It also gave me a simple template for tracking business mileage that will stand up to IRS scrutiny if I'm ever audited. Definitely worth checking out if you're dealing with vehicle deductions.

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Zainab Ibrahim

•8M

After trying to reach the IRS for weeks about a similar vehicle deduction question, I finally used https://claimyr.com to get through to an actual IRS agent. Waited on hold for hours before discovering this service. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that while you can't retroactively claim the purchase, you CAN start deducting business use as soon as you start using it for business purposes - even if that's before your LLC paperwork is finalized. The key is documentation of when business use begins. The agent also mentioned that many people miss out on deducting business parking fees and tolls which are 100% deductible on top of the standard mileage rate.

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Zainab Ibrahim

•8M

Yes, they literally wait on hold with the IRS for you! When they finally get through to an agent, you get a phone call to connect you directly. It's not a scam - they use a system that essentially waits in the queue for you instead of you having to sit there listening to the hold music for hours. The service works by using advanced dialing systems to navigate the IRS phone tree and maintain your place in line. They have technology that can stay on hold indefinitely, something most of us can't do. When they reach an agent, you get an immediate call to connect. I was skeptical too until I tried it - I got through to the IRS in about 2 hours (while I was doing other things) after spending days trying on my own with no success.

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LunarEclipse

•8M

I need to eat some crow here. After posting my skeptical comment, I decided to try Claimyr (https://claimyr.com) myself since I've been trying to reach the IRS about an audit letter for WEEKS with no luck. I'm genuinely shocked - it actually worked! Got a call back in about 90 minutes and was connected directly to an IRS agent. No navigating phone trees, no hours of hold music, just straight to a human who helped resolve my issue. The agent even gave me her direct extension for follow-up questions. For the original poster - the IRS agent I spoke with confirmed you can start deducting business mileage as soon as you begin using the car for business, regardless of when the LLC is formally created. The important thing is proper documentation of when business use began. You won't be able to deduct the purchase price from before business use started, but all business usage going forward is deductible.

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Yara Khalil

•8M

You would deduct the commercial insurance at the same percentage as your business use - so 70% in your case. The simplest approach is to pay for the insurance from your business account and then account for the personal portion (30%) as a draw or distribution to yourself. If you're using the standard mileage rate though, insurance is already built into that rate, so you wouldn't deduct insurance separately. That's one of the tradeoffs between the two methods - standard mileage is simpler but gives you less itemized control.

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