Monthly Archives: November 2021

Getting a Tax Deduction for Buying a commercial vehicle.

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Posted in Truck Financing

You can get a tax benefit from buying a new or “new to you” car or truck for your business by taking a section 179 deduction. This special deduction allows you to deduct a big part of the entire cost of the vehicle in the first year you use it if you are using it primarily for business purposes. 

A section 179 deduction is a special kind of tax deduction that businesses can take to reduce expenses. You can elect to take this deduction on the cost of certain types of business property. including business vehicles, instead of (or in addition to) recovering the cost by depreciating the property.

To qualify for a section 179 deduction for a business vehicle, it must be bought and put into service during the year in which you are applying for the section 179 deduction. Being placed in service means that a business asset is ready and available for specific use in a business or for the production of income.

In addition, the vehicle:

  • Must be eligible property, including vehicles, machinery, furniture, and fixtures. Land and leased property are not eligible.
  • Your company must buy it for business purposes.

Check out our commercial truck inventory

Want to know the details?

The most important qualification for section 179 deduction purposes is business use. You can only take a section 179 deduction for vehicles used more than 50% of the time for business purposes. The deduction is limited to the amount of use and can’t be taken on personal use.

Section 179 deductions work like depreciation. The purpose of depreciation is to spread the expense (and tax deductions) of owning a business asset like a car or truck over the life of that asset.

Normally, depreciation is deducted as an expense to the business over the life of the equipment or vehicle. But a section 179 deduction allows you to take more of the expense of the purchase in the first year.

There are two limits on the amount you can elect to deduction under section 179.

Dollar Limits. The total amount you can take as section 179 deductions for most property (including vehicles) placed in service in a specific year can’t be more than $1 million. In other words, all section 179 deductions for all business property for a year can’t be greater than $1 million. The dollar amount is adjusted each year for inflation. There is also a “phase-out” limit of $2.5 million.

in addition to the general dollar limits, the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2019 is $25,500, based on a specific IRS description of the vehicle type.

Business Income Limit. After you apply the dollar limit, the total cost you can deduct each year – including section 179 deductions – is limited to the taxable income from your business during that year. In other words, you can’t use a section 179 deduction to cause your business to have a loss. If you can’t take all or part of a section 179 deduction in one year, you can carry it over to the next year.

The calculation for this limit is complicated and it’s different for each business. See the instructions for IRS Publication 946 for type of vehicle and further details.

How to Take the Deduction

You or your tax preparer will need to complete IRS Form 4562 Depreciation and Amortization. Follow the instructions for Part I.

Key Requirements and Restrictions

  • The vehicle must be new or “new to you,” meaning that you can buy a used vehicle if it is used first during the year you take the deduction.
  • The vehicle may not be used for transporting people or property for hire. 
  • You can’t deduct more than the cost of the vehicle as a business expense.
  • You must put the vehicle “into service” (use it in your business) by December 31 of the tax year. If you don’t use it, you can’t get the deduction. Then prove that the vehicle was used in your business by the end of December, in case of a tax audit.
  • You cannot deduct more than your business net income for the year.

Contact us to learn more about what your chances are by using Section 179 for your business.

Fleet preventive maintenance

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Posted in Commercial Truck Service, Truck Service and Repair

Preventive maintenance (PM) is the regular and routine maintenance of commercial vehicle to keep them running, and prevent any costly unplanned downtime from unexpected equipment failure.

A successful maintenance strategy requires planning and scheduling maintenance of equipment before a problem occurs. A good preventive maintenance plan also involves keeping records of past inspections and the servicing of trucks.

Because of the complexity of maintaining a preventive maintenance schedule for a number of trucks, many companies use TruckMax Homestead to perform their required preventive maintenance tasks.

When is Preventive Maintenance Required?

The exact requirement for preventive maintenance will vary depending on the truck make and the operation it is performing. Truck industry uses standards to help determine schedules for maintenance so that commercial vehicles do not run to failure. These guidelines will also cover the type of inspection or maintenance that is needed.

Ideally, by following guidelines set down by manufacturers or standards, a PM schedule should ensure proactive maintenance rather than having to resort to reactive maintenance when something has already begun to fail.

Preventive maintenance keeps your drivers safe, reduces operational cost, and boosts productivity and manages business downtime. Keeping your truck or fleet in good working condition all-year round helps you avoid operational delays and maximize your productivity.

Following this type of predictive maintenance schedule, through tasks such as condition monitoring, requires accurate recording of inspections and servicing against an understanding of the lifespan of a particular piece of trucks. Preventive maintenance can be determined from these records.

At TruckMax Homestead, we provide all type of truck maintenance, including preventive. Our ASE certified technicians diagnose, and repair all makes and models of medium and heavy-duty trucks and yard spotters. So, you can rest assured you are in good hands. Contact one of our service advisors today and schedule your next commercial truck service.