Originally Posted by wegasque
#1;My wife is a mobile dog groomer and owns her own business. She has a mobile grooming van. Is the van counted as a vehicle or as a piece of equipment?
#2;This would affect repairs and maintenance, gasoline, depreciation, etc. The built-in electric generator runs off of the same tank that the van uses, which means she can't get the credit for gas taxes. Is that correct?
#1;it is a biz related / use vehicle, NOT equipment; for depreciation of the biz vehicle, you need to fill out Form 4562 to attach to your tax return.You need to enter the depreciation deduction on Section A, Line 17 and line 13 of SCh C of 1040. You must complete and attach Form 4562 only if you are claiming depreciation on property placed in service during 2013;Depreciation on listed property also used for personl ause less than 50%, regardless of the date it was placed in service; orA section 179 expense deduction.Other car/truck exp needs to be reported on line 9 of Sch C of 1040.
one way to reduce your federal tax liability is to deduct the business use of your vehicle. You need to keep track of all of your biz-related mileage and transportation expenses. To do this you can keep a journal or spreadsheet that documents when you traveled, how far you went in miles, what the purpose of the travel was and what type of expense you incurred. If you paid a parking fee document the amount and, if possible, collect a receipt. Allowable expenses for operation of a vehicle for business include all the associated costs of owning a vehicle. Fuel, oil, insurance, repairs, maintenance, depreciation, and loan interest are all permissible tax deductions. A tax write-off can also include lease payments if you lease rather than own the vehicle.
#2;it depends; there are two methods used to determine total costs for the write-off. These include the standard mileage and the actual cost method. The standard mileage method uses a rate that is determined each year by the IRS and is subject to change. You simply multiply business miles by this rate to find a deductible cost.For the actual cost method, total all associated costs ,i.e, depre/ reapirs or gas , car insurance costs etc of vehicle operation and determine an allocation for business use. For business owner, keep mileage records to prove the personal and business use of the vehicle. Total business miles divided by total miles driven will give you a percent of business use. Multiply this percentage by the total costs to determine the deduction to claim. Vehicle expenses are reportable on the tax form of the business. For the sole-proprietor, this would be form 1040 Sch C.You can deduct the costs larger of std mileage or actual costs.