Want the Maximum Deduction for your New Vehicle? 

In the old days ( 3 years ago), a business could deduct 100% of the purchase price of an SUV with a gross vehicle weight rating of more than 6K pounds that was used 100% in the business in the year of purchase.  Due to law changes, this is no longer the case.  In 2025, the deduction for that SUV may between 40% and 70% of the purchase price depending on several factors.  If you purchase a truck with an interior bed length of at least 6 feet, then you still might get a 100% deduction.  You also might get a 100% deduction if the vehicle is low-cost or has room for 9 passengers in the back or has no seating for passengers behind the driver.  Ask us for details before you make the decision on which vehicle to buy for your business in 2025.

How to Deduct Business Start-Up Costs

If you spend money on a business before it is operational, then those expenses will likely be deducted over 15 years (i.e. very slowly).  To avoid this, try to make your business operational as soon as you start spending money.  Do this by having your business “in a position to generate revenue” as soon as possible by making your first sale quickly or at least being in a position to accept the first sale.  Any expenditures after that positioning will be deductible “ordinary and necessary operating expenses” rather than non-deductible “start-up expenses”.

Be Careful When Spending Money on Behalf of your Partnership

If you are a partner in an partnership that has multiple partners, and spend money on behalf of the partnership, then your expenditures can be deducted under 2 methods. Either you ask your partnership to reimburse you (and then the partnership deducts the expense) or you don’t get reimbursed from the partnership and you deduct the expense (called “UPE” – Unreimbursed Partner Expenses) on your personal tax return. You can only deduct UPE on your personal tax return if the partnership agreement states that those expenses WILL NOT be reimbursed by the partnership. Review your partnership agreements to see what the language is and then ask us for guidance on how best to modify it to balance the interests of the partnership/other partners/you.