Just curious what you have found works for you. My goal when I started trucking was to get a paid for truck, but every CPA I use tells me I better have depreciation if I don’t want to pay tremendous taxes.
I’m curious if any of you have done both, and if it really is a lot higher taxes to run paid for equipment. Obviously it depends how much repair cost you have I know, but just looking for opinions.
Is paid for equipment better or is depreciation?
Discussion in 'Trucker Taxes and Truck Financing' started by OldeSkool, Nov 22, 2021.
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paid off is better. you don't have to worry about making payments if it slows down. i rather pay the kgb i mean the irs. 30% of $1500.00 every month and put the rest in my pocket. than $1500.00 in some bankers pockets.
Dadetrucking305, Lite bug, Aamcotrans and 9 others Thank this. -
You can depreciate the value of anything either in one year or spread out, with a new (ish) truck, the purchase value to depreciate is larger, but you have far less in any repairs etc to do.
An old truck will have a ton of writeoffs in repairs and maintenance, but significantly lower payment.
Bottom line is that depreciating new for the first 3 years is easy, but if you dont sell it and reinvest into another new one, youre trading tax payment for truck payment. -
Paid off is best in my opinion so you don't feel obligated to haul cheap freight just to make a truck payment.
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With the economic storm that I think is coming there is no way I would want a truck payment now , and there are lots of ways to shove money into a paid off truck .
Maintance and attention to detail is the key and with 981k on my cascadia now it still looks like a 400k truck and I'm not bashful about upgrades either ... new minimizer half fenders going on next week .Shanebklyn, blairandgretchen, 401-Alex and 7 others Thank this. -
In all aspects of life I prefer paid off. Trucking business, mortgage, etc. In some cases you can beat the system with big loans like mortgages when you can get a very low rate, high inflation, and tax benefits. I put peace of mind over all that because no matter what happens if you've got a paid off home at least you and your family won't be homeless. Of course you'll always have to pay property taxes which is a scam but that's another story...
A paid off truck/trailer/1 yr insurance also grants a man the very important option of throwing his hands in the air and saying #### you all, I'm going home. Belive me when I tell you when things are going wrong it's good to have the option to take your ball and leave. -
Watch the tax advantage but like you say, being able to walk has a lot satisfaction
I’ve raised all of our kids to never be married to their jobs, be better than the guy signing your check and always have $$ to just walk away
Too many people hate life due to traps
I’m 56. Maybe only had a “job” for 3 months
Everything else I’ve done I’ve worked hard at. Made good $$ and always was able to walk , although 90% of my life I’ve been self employed which helps but in all that time I’ve never had that job. Maybe a bad day here and there but always liked going to workblairandgretchen, Lite bug, Shanebklyn and 3 others Thank this. -
The best would be to pay cash for an asset then depreciate it, putting aside the money into a savings account to pay cash again.
Shanebklyn, RockinChair, blairandgretchen and 3 others Thank this. -
blairandgretchen and BennysPennys Thank this.
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My truck has been paid off for a long time.. I trade trailers every 3 years for tax reasons.. I have 3 different trailers so I end up trading a trailer every year.. I also keep a project truck around.. that always relieves me of any major tax issues
blairandgretchen, Pamela1990, bzinger and 3 others Thank this.
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