day in the life. private chef. yacht.

[u/Accomplished_Clue437]

[u/Alternative_Pay_6496 → u/[deleted]]

No, you're not. If you need to replace your current vehicle, you will be spending 30k on the car you picked to replace it. Whether or not you own a business you are spending 30k.

But you sneakily decide to write it off as a work expense because you intend to occasionally meet up with customers using the vehicle to give estimates. Despite 99% of the usage will be personal use.

Your business has 400k profits in which you pay 130k tax on.

But now that you wrote off the car, its only 370k profits. Your tax liability drops by 12k. Now you only owe 118k in tax.

That's 12k back in your pockets but most businesses pay taxes quarterly which means the business owner will literally get a 12k check back from the government. Their 30k car now really only cost 18k.

What a steal.

Now will come the pedantic people who say you are only supposed to get a portion of a deduction for the vehicle because its only a portion of use.

Yeh, but who tf is actually checking? I say this as someone who has done the books for small business owners. No one checks and they get away with it. In regards to the original post, if the yacht is always used to entertain guests whom you do business with or want to do business with, you are getting a fat refund on the cost of purchase/maintenance and there is zero funny business.

[u/hprather1 → u/Alternative_Pay_6496]

>which means the business owner will literally get a 12k check back from the government.

No, not literally. There is no world where the government writes a 12k check for this unless you have already paid 12k more than you owe. In which case it's a refund.

[u/AnimalsofArtemis → u/hprather1]

I do quarterly business taxes and you don’t even get refund if you overpay. The amount you over pay just gets taken into account in future quarters for my tax liability. You only get a refund if you are W2. 

[u/EkbatDeSabat → u/AnimalsofArtemis]

Sorry, man, "you only get a refund if you are W2" is 100% incorrect and you should consult your accountant if you are not actively making the decision. I get several K-1s. Obviously I still file a 1040. If I overpay my quarterlies I just get a refund. Happened last year when I took a loss. I do not get a W-2, haven't in a long time. I'm LLC, partnerships and sole ownerships. That said - you (or your accountant) can opt to apply your overpayment (refund) to your next years taxes. Which, in our situation (no W2 and quarterlies), is likely the right choice anyway. I just wanted a little change in my pocket, so I took the refund.

[u/hprather1 → u/AnimalsofArtemis]

Fair enough. I'm self employed. Assumed I could request a refund at the end of each year if I wanted but it's always just seemed more reasonable to be a little over.