I have a question on how to treat expenses that extend the life of the truck like engine, transmission and third member rebuilds on the tax return. A couple of years ago, I heard those type of expenses needed to be amortized through depreciation as opposed to writing them all off in the year of expense. Does anyone know what the proper treatment of these expenses are? I have done it both ways, but would like to know what the IRS wants.
Expensing major repairs on tax return???
Discussion in 'Trucker Taxes and Truck Financing' started by tompetty69, Feb 19, 2018.
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tompetty69 and Bakerman Thank this.
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Pretty sure at least engine rebuilds you are suppose to depreciate it instead of all at once but I could be wrong as i'm no accountant.
blairandgretchen, tompetty69 and BoostedTeg Thank this. -
Just put it on a depreciation schedule if in doubt. Then take it all the same year under section 179. With the new, higher, limits you will never have to take less in depreciation than you want to.
If you get audited and they don't like you expensing something, they'll amend the return and create significant interest and penalties. At that point you can't amend it to take it under 179. So, when in doubt, create an asset and take it under 179.mtoo, tompetty69 and Travelling Accountant Thank this. -
tompetty69 Thanks this.
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tompetty69 Thanks this.
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One item that is often overlooked when it comes to depreciating assets is TIRES.
Bottom line is this: Find a tax professional in your area that has specifically worked with trucking company tax returns before, and verify any information you receive that is not from a professional. Taking "parking lot tax advice" is a sure-fire way to wind up with your butt in a sling!! -
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