Tax Write-Off for Electric Vehicle for My Restaurant Business - Requirements and Limits?

Happy to help with your EV tax write-off questions! The rules can be a bit tricky so let's break it down. Yes, you can deduct the business portion of your lease or finance payments each year. If you lease, you deduct the actual lease payments. If you finance, you'll typically depreciate the vehicle's cost over time and deduct the interest on the loan payments. The key is tracking and documenting the business usage percentage accurately. Title status (salvage vs. clean) doesn't generally affect tax deductibility - the IRS cares about the actual value and business use, not the title status. However, be aware that a salvage title could affect your claimed value and might raise questions in an audit about the true fair market value. Vehicle weight definitely matters! For electric vehicles under 7,000 pounds, the rules changed with the Inflation Reduction Act. For 2025, qualifying new EVs can get the Clean Vehicle Credit (up to $7,500) if they meet certain manufacturing requirements. For heavier vehicles (over 6,000 pounds), you might qualify for more generous Section 179 expensing. To register under your LLC, simply list your business name as the owner when purchasing. The title and registration will show your LLC name. Your state's DMV might require your business documentation (EIN, LLC certificate) to complete the registration.

I went through this exact situation last year with my consulting business! After struggling to understand all the tax implications and getting different advice from everyone, I discovered taxr.ai (https://taxr.ai) which helped make everything super clear. It's like having a tax expert specifically for business vehicle write-offs. I uploaded my vehicle purchase details and business info, and it outlined exactly how much I could deduct based on business usage percentage, vehicle type, and weight class. It even created documentation templates for tracking business mileage that satisfy IRS requirements. The best thing was getting a clear comparison between lease vs. buy scenarios specifically for EV tax benefits. The analysis showed me I'd save about $3,800 more by purchasing rather than leasing in my specific situation.

I have to admit I was totally wrong about taxr.ai! After expressing my skepticism, I decided to try it myself for my photography business vehicle. The analysis was incredibly detailed and identified a major mistake I was about to make. I was planning to lease a Model Y for my business, but the tool showed how the new EV tax credit structure would benefit me more through purchasing. The documentation it generated saved me hours of work - it created a custom mileage log system that tracks business percentage use and calculates quarterly tax implications. When I met with my accountant, she was genuinely impressed with the substantiation documents and said they were exactly what the IRS looks for in an audit situation. She actually asked me where I got them so she could recommend it to other business clients! The vehicle weight classification analysis was spot-on too - it showed me exactly how the under/over 7,000 lb distinction would affect my specific vehicle choice. Definitely worth checking out if you're making a business vehicle decision.

One really important thing that hasn't been mentioned yet - if you're planning to take advantage of the business EV tax benefits, you should know that calling the IRS for guidance is a NIGHTMARE right now. I spent 3 hours on hold last week trying to get clarity on the business percentage requirements, then got disconnected! I eventually used Claimyr (https://claimyr.com) which got me connected to an IRS agent in about 11 minutes. They've got this system that holds your place in line and calls you back when an agent is available. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent confirmed that for my situation, I needed to use the vehicle more than 50% for business to claim certain deductions, and clarified some confusing points about the clean vehicle credit for business use. Saved me so much frustration compared to repeatedly calling and getting nowhere. The IRS wait times are insane right now with all the new EV credit questions.

I need to publicly eat my words. After expressing extreme skepticism about Claimyr, I was desperate enough to try it yesterday. I've been trying to get clarification about Section 179 deduction limits for my business EV purchase for WEEKS with no success. I used the service around 2pm, and at 2:17pm I got a call connecting me to an actual IRS business tax specialist! I nearly fell out of my chair. The agent walked me through exactly how to calculate the business use percentage requirements for my situation and confirmed that I could claim the clean vehicle credit AND depreciation (though with specific limitations). The information I got was incredibly valuable - turns out I was misinterpreting a major part of the EV tax credit rules that could have cost me thousands. The agent confirmed I needed to maintain at least 50% business use for the entire recovery period or face recapture taxes. For anyone struggling with business vehicle tax questions, this service is worth every penny. Can't believe how much time I wasted trying to get through on my own.

Just wanted to add that weight classification is SUPER important for business vehicle tax deductions! If your EV weighs more than 6,000 pounds GVWR (check the driver's door jamb sticker), it qualifies as a "heavy SUV" for tax purposes and might be eligible for much more generous Section 179 expensing. For 2025, business vehicles under 6,000 pounds are subject to "luxury auto limits" for depreciation, which significantly restricts how much you can write off each year. But EVs over 6,000 pounds (like a Rivian R1S, Ford F-150 Lightning, or Hummer EV) can potentially qualify for much higher immediate expensing in the first year. Just make sure your business use stays above 50% for the entire depreciation period or you could face recapture taxes!

Just wanna add something important that ppl often forget - registering a vehicle in a business name might affect your insurance requirements! Most personal auto policies won't cover a business-registered vehicle, so youll need commercial auto insurance which can be a lot more expensive. Make sure to factor that into ur costs when deciding if the tax benefit is worth it. My commercial policy for my business truck costs almost 2x what my personal vehicle costs.

To answer ur question about LLC on the title - I did this last year for my business. The title will say "Your LLC Name" rather than your personal name. But heads up - some finance companies make it harder to get loans for business-owned vehicles and might require additional documentation or personal guarantees. This was easier for me when I went through a credit union that already had my business accounts rather than dealer financing.