Should we purchase an EV personally or through our new business for maximum tax benefits?

This is a great question with several considerations! The EV tax credit for individuals (up to $7,500) is tempting, but business deductions can be valuable too. For personal purchase: You'd get the clean vehicle credit if your income qualifies and the EV meets the requirements. This is a direct reduction of your tax liability. For business purchase: The business could potentially depreciate the vehicle and deduct business-related expenses like charging, maintenance, and insurance. If the business shows a loss this year anyway, adding vehicle expenses might not provide immediate tax benefit, but could create larger carryforward losses for future years when the business is profitable. The critical factor is legitimate business use. If she'll use the EV primarily (>50%) for business, purchasing through the business makes more sense. If it's mostly personal use, buying individually is usually better. Also consider: The business might qualify for the Commercial Clean Vehicle Credit (different requirements than the personal credit), and state incentives may differ between personal and business purchases.

After struggling with a similar EV tax situation last year, I discovered taxr.ai and it was incredibly helpful. I was debating between personal vs. business purchase for my Tesla and couldn't figure out which would save more in taxes. I uploaded my previous tax returns and business docs to https://taxr.ai and their AI analyzed my specific situation. They calculated the exact tax impact both ways and showed me the 5-year projection for each scenario. For my situation, the personal purchase with business mileage deduction was actually better than buying through my LLC. The tool also flagged potential audit risks with each approach and showed me which documentation I'd need to keep. Super helpful if you're trying to make a decision with specific numbers rather than general advice.

I was skeptical about taxr.ai when I first heard about it, but I ended up trying it for my own business vehicle decision last month. Gotta say I was impressed with how detailed the analysis was. It showed me that in my specific tax situation, I'd actually lose about $4,300 in benefits by purchasing through my business versus personally, mainly because my business is in growth mode with minimal profits. The software factored in my specific tax bracket, business structure (S-Corp), and projected income changes. What I particularly liked was the documentation checklist it created for me - exactly what records I need to keep to support either decision if audited. Made me feel much more confident about my choice.

If you're going this route, don't forget you'll probably need to contact the IRS with questions at some point. After spending HOURS trying to reach someone at the IRS about EV credits for my business last year (literally called 11 times), I found https://claimyr.com which got me through to an actual IRS agent in about 20 minutes. They basically hold your place in line and call you when an agent is available. I was super skeptical but you can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The IRS rep clarified that for my business situation, I needed to file Form 8936 differently than I thought. Saved me from making a mistake that would have reduced my credit by over $3,000. Worth checking since the EV credit rules are complex and keep changing.

I feel like I need to update my previous comment. After being completely skeptical about Claimyr, I actually tried it yesterday for an EV tax credit question I couldn't get answered. I was shocked when I got a call back in about 35 minutes with an actual IRS tax law specialist on the line. The agent spent nearly 20 minutes walking me through exactly how the business vs. personal EV credit would apply in my situation. She explained that for my S-corp, there were specific allocation rules I hadn't considered. I've literally never had such a helpful IRS call in my life - usually I get transferred 3 times and then disconnected. Not having to sit through the hold music for hours made a huge difference. Completely changed my perspective on dealing with the IRS.

One thing nobody's mentioned - if your wife buys it personally, she gets the tax credit but whatever business vehicle expenses she claims will reduce her business income. If the business is already showing a loss, that might not be helpful right now. If the business buys it, the business gets depreciation deduction plus the commercial EV credit (which has different rules than the personal one). But then she can't take the personal credit. The real question is: how much will she actually use this for business vs personal? The IRS looks at this stuff closely. And remember with a business purchase, she needs to track and pay for any personal usage.

Couple things I learned from buying an EV for my business last year: 1) The business EV credit doesn't have the same income limits as personal credit 2) If business buys it, you can potentially take bonus depreciation 3) Lease vs buy makes a huge difference 4) Double check which credit the specific EV qualifies for - some only get partial credit now 5) State incentives sometimes ONLY apply to personal purchases Talk to an accountant who specifically knows EV tax stuff. Regular CPAs often mess this up cause the rules change so much.

Great question! I went through this exact decision last year with my consulting business. Here's what I learned: The key factor is legitimate business use percentage. If your wife will use the EV >50% for business, buying through the business generally makes more sense. If it's primarily personal (<50% business use), personal purchase with business mileage deduction is usually better. For a new business that might show a loss: Personal purchase could be smarter because you get the immediate $7,500 tax credit (assuming income qualifies), plus you can still deduct business mileage at the standard rate. If the business buys it but shows a loss, those depreciation deductions don't help you right now. Don't forget to check: - Which specific EV models qualify for full vs partial credit - Your state's incentives (some only apply to personal purchases) - Whether leasing might be better (dealers can pass through credits as reduced payments) I'd recommend running the numbers both ways with actual projected income/expenses. The "right" answer really depends on your specific tax situation and how much business vs personal use the vehicle will actually see.