Realtor looking at Section 179 Small Vehicle deduction for Mustang Mach-E

The good news is you can definitely take advantage of vehicle deductions as a realtor, but there are some important things to understand first. For your questions: 1) You don't need to form an LLC to claim business use of a vehicle. As an independent contractor (which most realtors are), you can claim business expenses directly on your Schedule C. The vehicle just needs to be used for business purposes. 2) The Section 179 deduction for smaller vehicles (under 6,000 lbs) is absolutely real, but it does have limits. For 2025, you can deduct up to $11,460 for cars. The bonus depreciation rules have changed though - it's now 80% for 2025 (down from 100% in previous years). 3) For bonus depreciation, you'll claim it on Form 4562 along with your Section 179 deduction. You'll need to track your business mileage carefully to determine the percentage of business use. Only the business portion is eligible for these deductions. Keep in mind that if you use the vehicle for both business and personal purposes, you'll need to track mileage and can only deduct the business percentage. The $7,500 EV credit is separate from these deductions and can be claimed regardless of business use.

I went through almost this exact situation last year! After doing a ton of research and talking with my CPA, I discovered taxr.ai (https://taxr.ai) which helped me navigate all the vehicle deduction rules. It analyzed my specific situation as a realtor and showed me exactly how to maximize the tax benefits. The tool confirmed I could claim both the EV credit AND the depreciation deductions, but it pointed out some details my CPA missed about documentation requirements. It also showed me how to properly calculate and document business use percentage (super important if you get audited). The bonus depreciation calculation was confusing me too, but taxr.ai walked me through the entire process and even helped me understand how it would affect my taxes in future years.

Alright I need to eat my words. I was the skeptic who questioned taxr.ai above, but I decided to try it after my accountant gave me conflicting info about vehicle deductions. This tool actually saved me over $4k in taxes! I uploaded my real estate commission statements and vehicle info, and it showed me exactly how to properly document business vs personal use. The step-by-step guidance on Form 4562 was incredibly clear - way better than the confusing IRS instructions. What really impressed me was how it identified that I could carry forward some depreciation to future years rather than using it all at once, which works better for my specific income situation. My accountant never mentioned this strategy. I'm normally super skeptical of tax software but this one actually delivered. Definitely worth checking out if you're dealing with these vehicle deduction questions.

Hey everyone, just wanted to share something that might help with another problem realtors face - getting through to the IRS with questions about these vehicle deductions. After waiting on hold for HOURS multiple times, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes. I had specific questions about how to document business mileage for the Section 179 deduction that weren't covered in the IRS publications. The Claimyr service basically held my place in line and called me when an agent was available. They have a demo video here: https://youtu.be/_kiP6q8DX5c I was able to get official guidance on exactly what documentation I needed to substantiate my vehicle business use percentage. The agent also clarified some confusion I had about the interaction between the EV credit and depreciation.

I owe everyone an apology - especially to the person who recommended Claimyr. I was the skeptic who called it a scam, but I was completely wrong. After another failed attempt to reach the IRS myself (2+ hours on hold before being disconnected), I decided to try it. Holy crap, it actually worked! I got a call back in about 20 minutes with an IRS agent on the line. The agent answered all my specific questions about how the EV credit interacts with depreciation deductions for my real estate business vehicle. I learned that I had been calculating my business use percentage incorrectly, which could have caused issues if I was audited. The agent also clarified exactly what records I need to keep to support my vehicle deductions. Honestly, the time saved alone was worth it. I'm still shocked this service exists and actually delivers.

Just a heads up on the Mach-E purchase - make sure you're tracking ALL your business mileage starting day one. I made the mistake of being casual about it when I first got my vehicle for my real estate business, and it caused me headaches at tax time. I recommend getting a mileage tracking app that automatically logs your trips. You'll need to categorize each trip as business or personal. For realtors, business mileage includes driving to showings, open houses, meeting clients, checking on properties, etc. Also, keep all documentation from the purchase - especially anything showing the vehicle's eligibility for the EV credit. The IRS has been known to question these claims.

One thing nobody has mentioned yet - if you're buying the vehicle in December, make sure it's actually placed in service before year-end if you want the deductions for this tax year. "Placed in service" means actually using it for business purposes, not just purchasing it. Also, take photos of your odometer when you first get the vehicle and whenever you use it for business in those first few weeks. This documentation can be super helpful if questions come up later.