Possible to expense car payments as home based trader?

Discussion in 'Taxes and Accounting' started by turkeyneck, Mar 14, 2022.

  1. Has anyone done it before? If so, just curious how you do it as it's a stationary business. Thanks.
     
    qlai likes this.
  2. bookish

    bookish

    As of decades ago, if the car is owned by an incorporated business you can expense the whole car. Otherwise you can only expense business purpose mileage. If it is a home based business it would be a good idea to have a second personal car.

    I could be wrong.
     
  3. Without knowing where you are and what type of entity you're trading through nobody can advise you with any certainty.

    Ask your accountant.
     
  4. qlai

    qlai

    Haven’t done it yet, but my understanding is that the easiest way is to lease the car, which would be 100% deductible including insurance. You must not use the car for your personal use, but as long as you don’t abuse it, I doubt it will be an issue.
     
  5. I'm in California and looking at TTS / S-Corp next year. Trying to see if I can offset some of my car lease payments on a 2nd "company" car that I'm shopping for. Does IRS care if it's a luxury car provided the expenses I'm looking to deduct is reasonable? I'm happy if I can offset part of the lease payments as a "perk" from my trading gains. Thanks.
     
  6. SunTrader

    SunTrader

    "The deduction is allowed only for that part of the expenses that is attributable to business." As in needed to operate business.

    Traders Tax Survival Guide.
     
  7. deaddog

    deaddog

    Pay for the car. Borrow the money to trade. Legit write-off
     
    rb7 likes this.
  8. qlai

    qlai

    @SunTrader , what is the deduction that refers to?
     
  9. tiddlywinks

    tiddlywinks

    Possible to expense car payments as home based trader?

    Possible, sure. There are always "exceptions" to the tax laws.

    For most however, in practice as a "home-based trader", there are not many instances where a vehicle is REQUIRED for the business operation. Now then, if you taking on clients, running an advisory service, or promoting other products and services beyond claiming to be a "home-based trader", a vehicle may be necessary to conduct a for-profit business.

    All that said, if the business creates an "accountable plan", certain vehicle (and other) expenses MAY be eligible for reimbursement, without taxation to you, and used as an expense by the company.
     
  10. SunTrader

    SunTrader

    The subject of this topic.
     
    #10     Mar 14, 2022