Guy shares a magnificent tax-saving hack for mega SUV and truck owners. Not everyone agrees with it
Financial experts always try to find loopholes in the policies framed by the government and come up with hacks to save more taxes. One such hack is making rounds on social media, where influencers are explaining to the public how they can exploit Section 179 to get maximum tax savings. In one such video, a bearded social media influencer boasts about how he saved almost $30k by purchasing a $70k truck. He even explained how that truck is going to save money for him till it gets depreciated to zero value, so, he has five years to enjoy the benefits.
The benefits that these influencers are talking about are nothing but loopholes in the way Section 179 of the United States tax code works. The rule states that if the person buys the vehicle in the name of the business, then they can deduct the full cost of the vehicle from the taxable income of their business making their profits lower. Hence, they need to pay less taxes. For a vehicle to be qualified for this scheme, the vehicle needs to weigh over 6000 pounds and the owner needs to use the vehicle for business purposes, but the catch is that no one can ensure that the vehicle is being used only for business purposes.
Another benefit is that the owners can even leverage the depreciated cost of the truck over the next four years and show it as an expense. In 2023, the rule allowed showing 100% of the cost of the truck as an expense. In 2024, still 80% of the total cost of the vehicle can be marked as an expense and can be used to lower the taxable income. In addition, since the vehicle is purchased for business purposes, all the expenses associated with the vehicle are also considered business expenses. That means insurance cost, fuel cost, and any money spent on upgrading or maintaining the vehicle are also shown as business expenses, lowering the taxable income much more. Section 179, which is widely used by business owners to purchase huge cars, was originally launched in 1958 to support the farmers and small business owners to purchase tractors, farm equipment, and cargo vehicles.
The guy's comment section was full of questions as the news was pretty new and exciting for people. @laflor.daisy | fashion commented, "I thought you could only choose to write off gas mileage OR maintenance. Not both?" Another user @Dillion Little commented, "Just another example of how the taxpayers get screwed over by the government." Some of the users knew the information and criticized him for how much he was paying for taxes.
Some others were really after him and denounced his idea. One user wrote, "He forgets to tell you the other limitations, and what you can and cannot buy, other than the gross vehicle weight." Some users went too far, including @Aviator.us.navy who commented, "This guy is full of sh*t. He does not know what he is talking about! You have to prove you are at least making $140k to deduct a $70."
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Editor's note: This article was originally published on February 15, 2024. It has since been updated.
