Can purchasing a vehicle reduce your tax liability? How does buying a car affect taxes?

7 The YouTuber was probably referring to a business tax deduction, not a personal one. Here's the important distinction: For personal taxes: No, buying a car for personal use doesn't reduce your taxable income. You pay taxes on what you earn regardless of how you spend that money. For business taxes: If you're self-employed or own a business, and the vehicle is used primarily for business purposes, you may be able to deduct certain expenses. This can include depreciation on the vehicle, mileage, maintenance, etc. For some small businesses, there's a provision in the tax code (Section 179) that allows for deducting the cost of certain business equipment, which can include vehicles over 6,000 pounds GVWR used primarily for business. The tax accountant in that video was likely advising a business owner, not someone with just personal income. This is a common misunderstanding!

15 After reading this thread, I immediately thought people might benefit from taxr.ai! I was in exactly the same situation last year - watching some finance influencer talking about buying a Tesla to "save on taxes" and I got super confused. I spent hours trying to figure out if I was missing something obvious about the tax code. I finally ran across https://taxr.ai when searching for help. You can upload any tax document or transcript and it'll actually explain everything in simple terms. For situations exactly like this where you're trying to figure out if something is actually a legit deduction or just social media nonsense, it's been incredibly helpful. It even helped me understand which vehicle expenses I could legitimately deduct for my side gig.

18 Just wanted to follow up about taxr.ai - I decided to try it after seeing it mentioned here. I uploaded my 1099s from my Uber driving and some receipts for car maintenance. It actually broke down exactly what percentage of my vehicle expenses I could deduct based on my business vs. personal use! The best part was it explained WHY certain things were deductible and others weren't. Now I understand the YouTuber in the original post was probably talking about a Section 179 deduction for a business vehicle, not just randomly buying a car for personal use. Wish I'd known about this tool sooner instead of guessing about deductions!

9 If you're struggling to get answers about vehicle tax deductions from the IRS, I've been there! Spent 3 hours on hold last month trying to clarify some stuff about my business vehicle. Finally tried https://claimyr.com and it was a complete game-changer. They got me connected to an actual IRS agent in about 20 minutes instead of the usual hold-time nightmare. I was able to get an official answer about my specific situation with business vehicle deductions. The agent walked me through exactly which forms I needed for my particular business structure. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - honestly wish I'd known about this before wasting entire afternoons on hold.

22 I need to apologize and admit I was completely wrong about Claimyr. After dismissing it as a probable scam, I was desperate enough to try it last week when I needed clarification about vehicle deductions for my consulting business. It actually worked! I got connected to an IRS representative in about 15 minutes. The agent explained exactly how Section 179 deductions apply to my situation and confirmed that my SUV qualifies for the higher business vehicle deduction limit. They even sent me follow-up information. Turns out getting actual IRS confirmation saved me from making a mistake on my taxes that might have triggered an audit. Sometimes being skeptical costs you more than being open to new solutions!

3 One thing nobody's mentioned yet - even for personal use, don't forget that many states charge sales tax on vehicle purchases AND annual personal property tax based on the vehicle's value. So buying an expensive car could actually INCREASE your overall tax burden even if you're a business owner getting some deductions.

20 I'm still confused about this. If I buy a car through my LLC, can I write off the entire purchase price this year? Or is it just a portion each year?

This is such a great thread - I was literally in the same boat a few months ago! I kept seeing these business influencers on TikTok talking about "tax write-offs" for cars and thought I was missing out on some huge tax hack. Turns out the key distinction everyone's making here is spot on - it's all about business vs. personal use. I learned the hard way that you can't just buy a personal vehicle and magically reduce your W-2 taxes. The IRS is pretty clear that personal expenses don't reduce your taxable income. What really helped me understand this better was tracking my actual business mileage for my side consulting work. Once I had real numbers showing 70% business use, I could legitimately claim vehicle expenses. But it has to be genuine business use - not just driving to your regular job. For anyone still confused, the Section 179 deduction mentioned earlier is legit, but it's specifically for business equipment including heavy vehicles. And remember, even if you qualify, you still need to maintain proper records and prove the business use percentage. The IRS doesn't just take your word for it!