Side "business" Vehicle Depreciation??

[scoutster]

I have been slowly starting a side landscaping, handyman and maybe down road plowing weekend side “business” to supplement my income. I am a Mechanical Engineer by trade and it is my M-F job at another company. This is currently where vast majority of my income comes from. I purchased a ¾-1 ton truck in early summer to start this side business. A truck is a pivotal requirement to start this type of business. I have done a few very small jobs in 2015, slowly putting this together since buying truck.

I am not an LLC, S, etc… yet. Starting with small office that was my den in house and hopefully grow from small start. The truck is planned to be almost 100% work related (90%), it has been barely driven in 2015.

I have been told by others I can claim depreciation of the truck for 2015. Like I said this is a side planned “business” and only had a couple small jobs in 2015. Can I depreciate the truck for 2015 and should I? Trying to make sure I do this correctly.

 

[LdiJ]

I have been slowly starting a side landscaping, handyman and maybe down road plowing weekend side “business” to supplement my income. I am a Mechanical Engineer by trade and it is my M-F job at another company. This is currently where vast majority of my income comes from. I purchased a ¾-1 ton truck in early summer to start this side business. A truck is a pivotal requirement to start this type of business. I have done a few very small jobs in 2015, slowly putting this together since buying truck.

I am not an LLC, S, etc… yet. Starting with small office that was my den in house and hopefully grow from small start. The truck is planned to be almost 100% work related (90%), it has been barely driven in 2015.

I have been told by others I can claim depreciation of the truck for 2015. Like I said this is a side planned “business” and only had a couple small jobs in 2015. Can I depreciate the truck for 2015 and should I? Trying to make sure I do this correctly.

Personally, I would recommend claiming mileage rather than depreciating, but you probably did not track your mileage for 2015. If you decide to depreciate, the rules are complicated for vehicles and you should thoroughly read the transportation section of Publication 463.

 

[tranquility]

I have been slowly starting a side landscaping, handyman and maybe down road plowing weekend side “business” to supplement my income. I am a Mechanical Engineer by trade and it is my M-F job at another company. This is currently where vast majority of my income comes from. I purchased a ¾-1 ton truck in early summer to start this side business. A truck is a pivotal requirement to start this type of business. I have done a few very small jobs in 2015, slowly putting this together since buying truck.

I am not an LLC, S, etc… yet. Starting with small office that was my den in house and hopefully grow from small start. The truck is planned to be almost 100% work related (90%), it has been barely driven in 2015.

I have been told by others I can claim depreciation of the truck for 2015. Like I said this is a side planned “business” and only had a couple small jobs in 2015. Can I depreciate the truck for 2015 and should I? Trying to make sure I do this correctly.

You might want to go with mileage deduction rather than tracking all the costs and use depreciation. For a just starting business, I suspect the purchase of an entire truck might prevent profit for enough where you might be considered a hobby.

There is also a risk where a new business buys something expensive to have the deduction challenged as being ordinary or necessary. But, if you have another vehicle and you truly have a business where you are tying to make a profit and you need the vehicle, there is nothing inherently wrong with capitalizing the investment.

 

[scoutster]

You might want to go with mileage deduction rather than tracking all the costs and use depreciation. For a just starting business, I suspect the purchase of an entire truck might prevent profit for enough where you might be considered a hobby.

There is also a risk where a new business buys something expensive to have the deduction challenged as being ordinary or necessary. But, if you have another vehicle and you truly have a business where you are tying to make a profit and you need the vehicle, there is nothing inherently wrong with capitalizing the investment.

I have 3 other cars, technically 4 besides this 3/4 ton+ truck. To start something like this, a truck this size was required and it will be used very little for personal use. I had little work in 2015, slowly putting this together while main job demanded a lot of my time last number of months.

 

[LdiJ]

I have 3 other cars, technically 4 besides this 3/4 ton+ truck. To start something like this, a truck this size was required and it will be used very little for personal use. I had little work in 2015, slowly putting this together while main job demanded a lot of my time last number of months.

I still think that mileage is more appropriate, but again, do thoroughly read the transportation portion of Publication 463.