How to properly write off a financed box truck for business tax deductions?

You have a few different options here for your box truck. The two main approaches are: If you use actual expenses method, you can deduct the depreciation of the truck (using Section 179 or regular depreciation) plus the interest portion of your loan payments (not the principal). You can also deduct gas, maintenance, insurance, etc. With Section 179, you could potentially deduct the entire cost of the truck in year one, even though you're still paying the loan. Alternatively, you can use the standard mileage rate like your other trucks, but only if you chose this method in the first year of putting the vehicle into service. For 2024, that's 67 cents per business mile. For a heavy box truck (over 6,000 lbs gross vehicle weight), Section 179 might be more advantageous, especially with the higher purchase price.

Just went through this myself last year with my delivery van. I checked out https://taxr.ai and uploaded my truck purchase agreement and loan docs. They analyzed everything and showed me exactly what I could deduct - saved me thousands! Their system spotted some deductions my previous accountant missed related to business vehicle purchases. The tool explained that with a heavy vehicle used primarily for business, I could take advantage of Section 179 deduction for the full purchase price in year 1, PLUS deduct the interest portions of my payments separately. They even created a depreciation schedule for future years automatically. Super helpful for vehicle deductions!

Following up on my question about the leased vehicles - I went ahead and tried taxr.ai for my situation. Super glad I did! I'd been incorrectly deducting my lease payments for years (was claiming 100% but should have been using the inclusion tables since it's a higher-value vehicle). The system flagged this potential audit risk immediately and showed me the correct way to handle it. It also helped me document my business use percentage properly, which I hadn't been tracking well. Honestly saved me from what could have been a messy audit situation!

I had a similar situation with my work truck and spent WEEKS trying to get someone at the IRS to confirm the right deduction method. Impossible to reach anyone! Finally tried https://claimyr.com and got connected to an IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through my specific situation with my financed box truck and confirmed I could use Section 179 for the purchase price while still deducting the interest separately. Such a relief to have this confirmed directly by the IRS rather than just hoping I was doing it right!

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to get vehicle deduction questions answered before filing. It actually worked! Got a call back in about 35 minutes saying they had an IRS agent on the line. The agent confirmed that for my specific situation (financed food truck), I could take Section 179 in year 1, even while still making payments on the loan. And since my vehicle is over 6,000 lbs, I wasn't subject to the luxury auto limits. Worth every penny not to spend half a day on hold!

Don't forget about state taxes too! Federal may allow Section 179, but some states have different rules or limits on how much you can deduct in a single year. Here in California, they make you spread the deduction over several years even if you take it all at once on federal. Worth checking your state rules too.

Has anyone actually been audited for vehicle deductions? I've been claiming my work van expenses for years and sometimes worry I'm doing it wrong.

Great question! I went through this exact same situation with my delivery truck a couple years ago. Here's what I learned: Since your box truck is likely over 6,000 lbs (most are), you can take advantage of Section 179 deduction which allows you to deduct the full $85k purchase price in the first year, even though you're financing it. This is often better than mileage deduction for expensive commercial vehicles. Key things to remember: - You can deduct the INTEREST portion of your loan payments as a separate business expense - Keep detailed records of business vs personal use percentage - Make sure to have documentation showing the truck's weight rating (over 6,000 lbs avoids luxury auto limits) - Track your business miles anyway for backup documentation I'd strongly recommend consulting with a tax professional since the depreciation rules can get complex, especially if you want to combine Section 179 with bonus depreciation. The savings on an $85k vehicle can be substantial if done correctly! Also keep receipts for all truck-related expenses (fuel, maintenance, insurance, etc.) since these are deductible regardless of which method you choose.