How The U.S Govt Helps You Write-off A Mercedes-Benz G-Wagon As A Tax Deductible
What if you can hack your way into G-Wagon ownership? That’s what Karlton Dennis, a tax strategist, tells you in one of his videos.
The Mercedes-AMG G63 needs no introduction. While the kit is as badass as things get, its price is where you’re reminded that it’s for the rich and successful. With pricey overalls and its gangster image, this high-riding SUV is a common sight among rich neighborhoods across the globe.
Needless to say, the G63 is one of those SUVs that has a spot reserved in your dream garage. As for pricing, the 2022 Mercedes-AMG G63 starts at around $180,000, and that’s before ticking some of the available options. People who can afford this 6000-pound bag of smiles can choose from a variety of exterior and interior paint schemes, wheel options, and accessories.
The Mercedes G-Wagon is all about entering in style but isn't a very practical item. Its boxy proportions may not be for everyone but is certainly a throwback. With an illustrious history to its name, the G-Wagon is as much an icon as the Range Rover or the Land Cruiser—deserving a space in the automotive hall of fame.
As expensive as it is, what if you can hack your way into G-Wagon ownership? Save some money and legally write-off your six-figure performance SUV? That’s what Karlton Dennis, a tax strategist, tells you in one of his videos. Let’s break down the specifics.
Introducing Section 179 And Bonus Depreciation
In his video, Dennis mentions that it’s legally possible to write-off your car, using section 179. The IRS allows a vehicle to be written off over the course of 5 years. But you can make use of section 179 and bonus depreciation to completely write-off the vehicle value in one year. According to the IRS, section 179 allows depreciation of business vehicles (also personal vehicles if used partially for business) based on vehicle weight. Per Investopedia, bonus depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets, such as vehicles, that has a "useful life" of less than 20 years.
For vehicles placed in service in 2021, the total section 179 deduction and depreciation for a light passenger automobile (new or used under 6,000 pounds), including a truck or van is $18,200, if the special/bonus depreciation allowance applies, or $10,200, if the special depreciation allowance does not apply.
For instance, say you bought a $50,000 car weighing under 6,000 pounds (GVWR); a write-off of $10,000 every year for up to five years with straight-line depreciation is unlocked by default. With bonus depreciation and section 179, the write-off value can be extended to $18,200 for the year. But if the vehicle is run 50% as business, the deductible value is halved to $9,100 with bonus depreciation.
Dennis explains the legal side of section 179 (heavy vehicles) when asked about writing-off a G-Wagon. If your vehicle has a gross weight (GVWR) above 6,000 pounds but below 14,000 pounds, you’re eligible for a $26,200 write-off if placed in service in 2021. But if the vehicle is 100% business use and is qualified for bonus depreciation under section 179, a complete write-off is possible says, Dennis. The Mercedes G-Wagon, owing to its 6,000-pound gross weight, is eligible for the write-off using this strategy. Other popular SUVs that can be included under section 179 are the 2022 Audi Q7, BMW X5, Land Rover Range Rover, Cadillac Escalade.., etc.
Bear in mind that you need to have the money to purchase the vehicle in the first place. Additionally, if your taxable income is $50,000, you cannot claim a $75,000 write-off and expect a $25,000 refund. This here is a tax strategy. Plus, if you written off the vehicle in its first year, you cannot apply for bonus depreciation and 100% write-off on the same vehicle next year. It’s strictly a one-time thing.
https://www.hotcars.com/heres-how-to-write-off-mercedes-g-wagon-tax-deductible/
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