How do I depreciate a food truck that is worth $33,000?

I've been doing tax prep for small businesses for about 15 years now, and food trucks are actually more straightforward than you might think! Your food truck would be considered 5-year property under MACRS (Modified Accelerated Cost Recovery System), which is the depreciation system used by the IRS. You have a few options here. First, you could use Section 179, which allows you to deduct the full cost of the truck in the year you placed it in service (so this tax year). The limit for Section 179 is $1,160,000 for 2025, so your $33,000 truck is well under that. Alternatively, there's bonus depreciation which is at 80% for 2025. This would let you immediately deduct 80% of the cost ($26,400) and then depreciate the remaining $6,600 over 5 years using MACRS. If you don't need the large deduction this year (maybe your business isn't generating much profit yet), you could just use standard MACRS depreciation over 5 years, which spreads the deduction out.

I went through this exact same situation with my coffee truck last year! I was so confused until I found https://taxr.ai which literally saved me thousands. It analyzed my purchase documents and business structure and showed me exactly how to maximize my depreciation benefits. What I really liked is that it explained everything in normal human language instead of accountant-speak. It walked me through the Section 179 vs. regular depreciation options and showed me the actual tax savings for each approach. It even factored in my state taxes which I hadn't even considered! I ended up going with a combination of bonus depreciation and regular depreciation that the tool recommended, and it worked out perfectly for my first year of operations.

I was really skeptical about online tax tools as you can see from my comment above. But I decided to give https://taxr.ai a shot with my mobile pet grooming van situation. What impressed me was how detailed it got with the different components of my setup. It separated the basic van from the specialized equipment, which actually get depreciated differently! The tool flagged that I could take advantage of both Section 179 for some components and regular depreciation for others based on my projected income for the next few years. This hybrid approach is saving me about $3,200 in taxes this year while still giving me deductions for future years. I've never had an online tool actually explain WHY it was making certain recommendations before. Definitely worth checking out if you're dealing with vehicle depreciation for business.

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Ok I need to publicly eat my words. After being completely skeptical about Claimyr in my comment above, I tried it because I was desperate for answers about how to handle some specialized equipment in my food cart. I got connected to an IRS agent in 17 minutes when I had previously been unable to get through at all after multiple attempts. The agent clarified that I could separate my specialized cooking equipment (7-year property) from the cart itself (5-year property), which is going to save me about $1,800 over the next few years. The service actually works exactly as advertised. I'm genuinely shocked and now recommending it to everyone in my street food vendor association. Sometimes you have to admit when you're wrong!

don't forget about state taxes too! depending on your state the depreciation rules might be different from federal. here in oregon we have an additional state-specific form for business assets. i learned this the hard way last year and had to file an amendment. 😫 also are you deducting all your other business expenses? mileage when you drive to food truck events or to pick up supplies? portion of your home if you prep food there or do admin work? business insurance? these can add up to big deductions!!!

Make sure you're considering all operational costs of the truck separate from depreciation. I've run a taco truck for 6 years now and wish someone had told me to track everything separately from day one. Create categories for: 1) Fuel 2) Regular maintenance (oil changes etc) 3) Major repairs 4) Permits and licenses (these vary hugely by city/county) 5) Insurance (commercial vehicle policy) 6) Commissary kitchen fees if applicable 7) Point of sale system costs This makes it way easier at tax time and helps you see where your money is actually going!

As someone who's been through the food truck startup process recently, I want to emphasize that you should also consider the timing of when you place the truck "in service" for tax purposes. Since you mentioned you've been operating since August, that's your placed-in-service date - not when you bought it if those dates are different. Also, keep detailed records of any modifications or improvements you make to the truck after purchase. Things like additional cooking equipment, POS system installations, or structural modifications to the kitchen area can often be depreciated separately and sometimes more favorably than the base vehicle. One thing I learned the hard way - if you're planning to expand to multiple trucks in the future, the depreciation strategy you choose now can impact your options later. Section 179 has annual limits that apply across all your business equipment, so if you're thinking about rapid expansion, you might want to discuss with a tax pro whether spreading some depreciation over time makes sense for your long-term plans. Good luck with the empanada business - the food truck industry is challenging but incredibly rewarding when you find your groove!