Auto-Tax Strategies: Get Your Dream Car For Free?

And for any of you that had the beginnings of a small business this year, a little side hustle, a side gig, you had this 1099 come out of nowhere. You're like, oh my gosh, I'm now in this realm. I'm listening to these guys podcast. I've got to be take more ownership of this small business opportunity. This is one of the best write offs is auto. There is a lot of opportunity here, a lot of mining for gold going on. You've got three weeks left. It's a great time to do some of your planning for the upcoming year and harvest a write off. Now you could do this trade transaction with no money down and still harvest a write off before year end.

Welcome to the Main street business podcast. This is Matt Sorenson joined by the illustrious Mark J. Kohler. We are excited to be here with you today. End of the year, things are wrapping up. There's a lot of tax questions and considerations. Maybe it's a December to remember for you.

Oh yeah, I love a December to remember. That's a good one. At least for your tax return and your small business planning. That's what we can help with. As for your family dynamics and the train wreck coming, that's up to you to.

That's another podcast, you know, that's another therapy podcast. You got to listen, that's for sure. Don't come here for that.

We're here for therapy on your tax and legal planning. So big topic today. It's a good one. And there's a lot of misinformation out there. A knee jerk reaction. I need a write off. I'm going to go buy a car or I need to get an electric vehicle or get an SUV or get a truck or all these things that we business owners think are going to help them on their tax return. And they might and they could.

But we do love it.

Yeah.

Yep. It just depends. And that's why we have a whole damn podcast to tell you when it matters and when it doesn't. And you might also be like, guys, I don't even know how to write off my auto anyways. I started a new business. I got a side hustle now I've got a rental. I don't even know my options on writing this off. What do I need to do? Why is this valuable to me? We're just gonna break it down. Whether you're buying a new auto, you're using one in your business or your rental properties, we're just gonna break it down. And I, you know what? I Did I googled. To prepare for the podcast today, I googled auto deduction strategies. And. And the Marc J. Kohler article was number two.

Oh, really? Number two was number one. Sponsored.

I don't remember what number one was, but it looked dumb. I was like, why would I click on that one?

Of course, Mark J. Kohler's got it. Well, thank you, Matt. I appreciate you. Well, and I do have a great article on this. I have kind of seven rules of thumb. We break this down. Let's make sure that's in the minutes. If I could tell my studio director here, we do an article every January. It's@markjkohler.com in my blog section. Every. Every January, I update it for the changes in the auto mileage limit and depreciation limits. It's all. It's constantly changing. Let me start with number one. I think this is an important point. Two things, if I may. Number one.

Number one, A and B. Yeah, this

is A and B. Once you choose a method for a vehicle, you're stuck with that method. That there is some really unique rare instances where you can change it. But don't go there. All accountants tell their clients, and it's true. Just once you choose a method for your car, you're stuck with it. Those two methods, this is my second point. A and B are mileage or actual. That's it. So once you choose a method, you're stuck with it. And then number two, what is that method? Mileage or actual? A lot of the talk today is going to be in the actual arena because mileage is pretty straightforward.

Yeah, mileage is pretty straightforward. And you're just tracking your business miles. Okay, These are miles used on business, not commuting to and from your office. For you business owners, that's commuting, that doesn't care. But you're traveling to a conference, you're going to meet a client somewhere. You're in real estate, you're driving to properties, you're going to your rental property. This is all mileage that you're tracking, and this includes the IRS is like, let's just freaking simplify this. Don't track your repairs and your gas and, you know, your insurance and all this stuff involved with your car. Just track the mileage for business and we're gonna give you a certain cents per mile, which is what is 60, 65.5, 65.5. So if you 1,000 miles for business, that's a $655 deduction that's going on your tax return. It's actually pretty powerful. And so a lot of clients like mileage because it does give them pretty good bang for their buck.

Yeah. And for any of you that had the beginnings of a small business this year, a little side hustle, a side gig, you had this 1099 come out of nowhere. You're like, oh my gosh, I'm now in this realm. I'm listening to these guys podcast. I've got to be take more ownership of this small business opportunity. This is one of the best write offs is auto. Now, you don't have to reimburse yourself out of the business. You don't have to have an llc. You don't have to have a business bank account or a tax ID number. Even if you got a 1099, that means you have a small business. Now, I'm talking about the 1099. For ordinary income, you're selling a product or service, something like that. So you got a 1099. Let's look at auto. So you'd go back for the during the year and the IRS would love that you had kept a mileage log day by day. 99.9% of people don't. But you've got to be honest about it and try to recreate the best mileage log you could of your mileage throughout the year. And you're going to give that to your accountant and they're going to book it, meaning they're going to take that mileage for business, not commuting, not personal, and multiply it by 65 and a half cents. Done.

That's it.

So just turn that in and you can have multiple cars. You could have, oh, my kid's car, my wife's car, my car, my husband's car. We all use these different cars for business. You just turn in the mileage for each car. Done.

But what if the business doesn't own the car? What if it's in my personal name or my spouse's name? Yeah, yeah.

Doesn't matter. It doesn't matter. The IRS doesn't care. They don't care if it's paid off. They don't care if there's a loan. They don't care who owns it. All you have to be able to prove is I was running errands for my business. I was meeting a customer, meeting a client, going to workshops, going to work sites, any of those things for business mileage, and you're good. But Matt, I can write off more because I put a sign about my business on the side of the car.

Oh, did you wrap that Lamborghini?

Yeah.

So every mile you drive is business.

Yeah, I wrapped a Lamborghini, but not the Ferrari.

I'm going to the grocery store for eggs. Business. It's called marketing. No, IRS has blown that one up. Said, no, it's not. Nice try. Genius. Yeah. So that is not going to count as mileage for business purposes. So don't think just throwing the wrap on. And they're less common right now. Actually, you see those less and less. Maybe this is why.

Unless you live in North Scottsdale, the

Lambos are a little over the top in North Scottsdale, but yeah. So don't think about the wrapping. I mean, I guess if you're into that. But it's not going to give you an auto deduction. Don't, don't think that's going to help

you get an auto. Yeah. Now we're not talking about R A P P I n G. If you want to throw down a 90s video, do a little video on walking on your car, dancing and rapping a song. You can do that. We're talking about W R A P P I n G. Since it's Christmas time. Wrapping is a technique of putting a design of your company name on the side of your car that does not increase your tax write off. You got to write off the cost of doing it, but it does not increase your business mileage. So in summary, Everybody, and for 30 years, 90% of small business owners would do mileage. It was easy, it was simple. It's, you know, this 40 to 65 cents a mile throughout the years. It was just the way to go. It was easy, it was simple. And all of you can do it right now. And once you choose mileage, you're stuck with it. But along comes the tax cuts and Jobs act and Donald Trump and even the Biden administration with electric vehicles. And Donald Trump threw in a bunch of stuff with the electric vehicles. They revamped the entire auto deduction regime that was set up by Ronald Reagan. I mean, seriously, it was so antedated. And so this new ability to write off your car or SUV or truck or electric vehicle just went on steroids and it stimulated the economy. It was great for the auto industry. It was great for small business. And so now this actual deduction has come back with a vengeance.

Yeah. And that's why we're talking about it at year end. Because a lot of people are like, well, I want to buy an auto and write the whole damn thing off. For the vast majority of it in this year as a tax strategy to save me on taxes this year right now in 2023. So typically when you buy equipment in your business, and that's an auto is considered, or a truck, depending what you're doing, you have to write that off over time, you depreciate it. So it's like if you buy something for 50 grand, the IRS might say, well, you use that over five years. So we're going to let you take $10,000 a year. And different assets and equipment have different life cycles of how you write this off. And that's called depreciation. But when you're able to accelerate depreciation, and this is the auto deduction strategy now this is Mark's talking about tax cuts and Jobs Act. They said, yeah, that five year window or 10 or seven, whatever the it might be for, we're just going to collapse it. We'll let you take 100% of it now. And I think it was 80%.

Yeah, it was bonus depreciation up at 100% until the end of 22. So this year it was 80%. Yeah.

Which is still good. So you're on. This is better than it's been besides last year.

Yeah.

A couple years before.

And for you accountants out there, and for those that know a little bit about this, there's a nuance called the 179 and bonus depreciation. And that's that ability to ramp up this write off that Matt's talking about. And so we've taught in our tax certification training to so many advisors that you actually go for the 179 first, then you throw on bonus. Because 179 cannot run you into a loss on your business, but bonus can. And so you want to take that 179 first, then grab bonus. So for any of you out there that are thinking of buying a vehicle before your end, remember that's what we're coming to. We're just giving you the history here.

They're like, guys, give me the strategy. I'm going to go talk to my wife. I need a truck.

I'm shopping.

Give me my ticket.

Give me the ammo, get the ammo.

But Mark and Matt said, I'm going to save taxes on this. So it's like, I made money.

I know, I know.

So CPA math. Right.

So. But I want everybody to know the concept. So when you're at a dinner party, when with your little reindeer glass full of eggnog, talking with Uncle Eddie, you want to make sure you know, and when someone Asks you, what do you do with your vehicle? Oh, I do mileage. It works for me. Oh, I do actual. Now here's one of the big rules. You cannot do actual unless the vehicle's used 50% or more in the business. So mileage again sometimes is super easy for any of you that have a side gig or a side hustle because you have commuting miles, you have personal miles and your business miles just don't kick it over 50% use. But for any of you that have that 50% or greater, now it gets tricky. And that's why I said in my article, I have seven rules of thumb. And now we can get into when should I go actual? Is this the time of year to rush out and buy a car? And it's always funny, Matt and I get these calls. I literally for years had one. Every New Year's Eve day would call me. The last one was from Hawaii. I remember it because they were on a different time zone. I'm like partying late at night, it's like nine o', clock, but in Hawaii it's like five. It's like we're at the dealership. I'm going to buy an F 350 or whatever. And I'm like, should I do it? I'm like, do you need a big truck? No. Well then why are you doing it? Because it's a great write off. Have you seen the gas mileage on that thing? Yeah. Well, dude, so what we've said is don't let the tax tail wag the dog.

Yeah.

How do you, I mean, how many ways can we say that?

Yeah, I just think. Yeah, I mean, don't go throwing away money just to trace a tax deduction. But if you're like, hey, I'm going to be in the market anyways for a new auto truck, whatever it is in my business. And we're at year end. Well, and you've got a great 20, 23 tax return, a lot of income. We'll go buy it now instead of in January of 2024 and wait in another year to get that tax deduction. Let's go grab it now. But we're not saying go out and buy these autos that you wouldn't otherwise buy because it's a tax section. You still give up money. Like that's the thing. It's not a tax credit, it's a deduction. Like you're still only getting a deduction that reduces your taxable income. You're not getting dollar tax credit. So we're talking about tax credits, by the way, for the EVs, vehicles, if you're purchasing one for personal or business, because there's a personal EV deduction and or tax credit, I should say, and a commercial one. But one thing I want to go back to, you said this is really important. I want to make sure you guys get this Uncle Eddie in the example there. I think he probably did mileage on that rv because that thing was, that thing was worth maybe five grand. And he did drive across country.

Oh my God.

I mean, right? They went all the way from wherever the hell they were to Chicago.

Yeah.

To visit the Griswold. So I probably would have thrown mileage for him.

Well, it's funny you go there with that joke because that's the next topic. Okay, now I want to take a breath, everybody, because this is a lot. We're throwing a lot at you. So I'm going to, I want to review where we're at. Number one, you want to make sure you choose the right method for your vehicle because you're stuck with it until you sell it. Number two, you want to realize that mileage could be a good option and maybe your only option. And then you want to say, okay, actual. And what am I doing with actual? Oh, I get to write off fuel, repairs, maintenance, and then this big depreciation kicker where I can write off this car, whether it's 20 grand or an SUV or truck, that's 60 grand. Should I ramp that deduction up and just write off fuel or should I stick with mileage? And so that's where we're at now. And then the next point we made was, make a smart one. Let's not throw good money at bad. Let's make sure we need this vehicle. It makes good economic sense. Okay, now on this mileage thing.

Yeah.

This is one of my first rules. Rules of thumb, think about your business use. Are you going to put on a lot of miles or not? Because if you say, let's just take an average vehicle at $40,000, let's say it's 40,000, new or used, loan or no loan, doesn't matter, it's 40,000. If you're going to put on 15,000 miles a year and you're going to crank on miles. Wow. Okay, so that could be at least eight to $9,000 deduction.

How many miles you say?

15,000 a year.

So yeah, almost 10 grand.

Almost 10 grand in write offs. Now, if you were to go with the actual deduction, you might get a $19,000 write off in year one, but that was in 2022. I'm looking at some of the numbers because you have this bonus. La la la la. So you might get a 15 to $20,000 write off in that first year. And you think, what's more $15,000? Which less 10,000, I better go actual. Well, then the next year you put on 15,000 miles and your gas receipts are three grand. And mileage would have been 15, you know, and 15,000 miles or 10 grand. Oh. So over a three year period, if I'm going to put on a lot of miles and I'm a realtor, I'm a broker, I'm a contractor. Holy crap. Why? Front load. All those write offs went over three years. I could get three times the amount. So you can't get greedy.

Yeah. And I think that's why I said, uncle Eddie, since that RV was a beater. Not very. The price point was low. You're only getting this depreciation, this 179 on the value of what you pay for the vehicle. Whether you bought it in cash or you got a loan, it doesn't matter. But it's what the purchase price of the vehicle was. But for mileage, it just matters. The miles, they don't care if you're rolling around in $100,000 vehicle or a $5,000 POS. And so if you drop 5,000 bucks on a beater truck and you're driving 10,000 miles a year, I'm telling you, mileage is going to pay off every time.

Yeah.

And over actual. But on the other hand, if you got a really expensive car or auto in your business and you're driving little miles, then the mileage is not going to be good for you and the actual is going to be better.

I love it. I love it. And I'm just going to say it another way. I have a little table that I've done in presentations where the value is up and mileage is down, you go actual. When value is down and mileage is up, you go mileage. That's just again, a general rule of thumb and that gets the conversation going.

But this is goes back to what you said at the very beginning. You got to pick that at the beginning.

Yeah.

Because you're stuck whether you go that. So for many of you that may think I'm going to buy a new auto end of year right now and I'm going to go actual. But it's not like you're able to jump back to mileage in your two or three you're on actual till you sell that thing.

Which brings up the next consideration, which is in my rules of thumb. What is your gas mileage? Miles per gallon? Mpg. So let's say you went with a pretty, maybe a hybrid, and you're getting 45 miles to the gallon. I'll even give you 40. Okay, so 40 miles to the gallon. Now, everybody, this is important. 40 miles to the gallon. A gallon of gas is 329. So I can go 40 miles with one gallon of gas. Well, what's my write off for that gallon of gas? That 40 miles times.655-065. That's $26. So I got a $26 write off, even though gas cost me $3.29. So now all of a sudden you're like, holy crap, I put on 10,000 miles. We're back to this $6,500 write off. But 10,000 miles divided by 40 miles per gallon times $3.29. That's only an $822 gas deduction. So I'm looking at a thousand versus six or seven thousand. Yeah.

Oh.

So again, your gas mileage could really help you. So if you're putting on a lot, you've got a great mpg and you're putting on a lot of miles. I don't care if it's a freaking Tesla or something. I mean, you may be like, wow, I'm going to go with mileage because the differential is so, so strong. Yeah.

So bottom line, if you drive a lot of miles, particularly in a highly efficient vehicle. Yes, Particularly in that scenario. Then that's the. I don't want to say sweet spot, because we do use that quite a bit. Yeah, but that's the money spot for mileage pays.

That's freaking awesome. Finding the sweet spot can be a real challenge. Here's the thing, too, let's go the other way. Let's say you're going to go out and get a truck. You've got. You're doing a rehab business, a rental property business, and you only pick up and drive the truck at the end of the day, you know, or on the weekends. And you've got your commuter car for your day job, and now you got this truck. Oh, it's like this. Yeah. You're 75% business use. You buy it used, you get a good deal, and you're not putting on a lot of miles. You're going around town checking on your rentals, doing a little rehab, and you're getting 10 miles to the gallon. All right, now we're talking because 10 miles to the gallon. All right, we could go back through the math, but you get the point. I'm going to get a much bigger gas deduction versus mileage deduction. And then, hmm, I could ramp up all those write offs up front and get a big write off here at the year end. Yeah. And you don't even have to put any money down. You could go out and buy a car with a truck with no money down before year end and get the write off even though you've driven it 100 miles.

Yeah. And a lot of people get confused by that. It's like, no, just buy the truck, get the loan. It's fine. Like you still own this and get to take this depreciation write off. But also like Mark's talking about. Now, if you're going actual, though, you're also adding on other costs to the vehicle. Not just the cost to purchase and own the vehicle, but you've got the gas, the insurance. We're also going to write off the interest on the loan.

Right?

Actually, we're going to write off the interest on the loan whether we're doing a mileage or auto. That's another good point. For any of you doing mileage, you still get interest on the loan as a deduction in addition to the mileage reimbursement. A lot of people miss that one, but. So there's a lot of other expenses that you still are going to add on though, to actual in particular, because you're going to get the maintenance and repairs, the gas, the insurance that you got to track that. I know it can be a pain, but guys, tracking this, it's a deduction. It's going to add on to this deductible amount you're going to take.

And this is where I love that used truck. For any of you out there with that side hustle, doing a little real estate or a side gig, a handyman service, landscaping, all that janitorial, all that. It's just that truck is cool because you throw on new tires, write off, you go, you know, you've got a repair write off and you're getting all the fuels, a write off. Your gas mileage sucks and you got the write off up front, so it makes sense. You got to look at the avatar. What type of vehicle am I looking for here? Okay, now before we go to electric, can I throw out another variable?

Yes.

I love that you brought up the rv. The RV plays into this. We have a lot of clients that have An RV that's been sitting on the side of the house doing nothing. And now they're like, I'm going to pop it into Waverly and I'm going to start renting out the RV on the weekends when I'm not using it. Create a little cash flow. Well, people, if you make that available 365 a year and then you just use it when someone else doesn't book it, that makes it 100% business vehicle. Now, I can write off your RV, which is not the fair market value today, it's your basis. So we can say, well, it's the lesser of fair market value or basis. But I can go in there and take a big write off for that RV that's been sitting there because you just started a business with that rv. Yeah. And you can go back to mileage or actual. But with an rv, I'm telling you, you're going actual Turo. Another big one. You picking up a vehicle and throwing it in the Turo program. You could go mileage or actual. So there's so many new businesses that involve the auto deduction too. Yeah.

And I just for any of you nerds out there that. Sorry, new nerds. Mark. Mark's like king of the nerds now. The main street tax pros. But so he says basis. Remember that's like basis meaning when he said the lesser of fair market value or basis. Basis meaning your cost to purchase the RV plus any improvements and you put into it to fix it up maybe or something like that. So that, that would be what basis means.

Yeah. And I'm going to throw this out. We're bringing this up in our tax pro training this next week. Is a lot of clients looking for that last minute tax deduction. They could go out and buy an RV for 50 grand. I mean, a decent RV is going to run you at least 50, you know, a decent one. And you go do your projections on Waverly. And if you haven't gotten familiar with Waverly, it's like Airbnb for RVs. Go try to rent an RV this weekend. Go try and rent one in your local area this weekend. And what does it cost you? How available are they? What are your options? Oh, there's sprinter vans, there's class A, class B, class C, fifth wheels, pop ups. They're all there on, on Waverly. So then find out what RV could work for me. Oh, now you've got an RV that you can use when it's not being rented. It can cash flow. And you just wrote off $50,000 that can be used against your W2 because that's a schedule C business you're renting. Personal property is going to go on a schedule C. We might ultimately throw it in an S corp down the road. But this is a great way to go for a year end tax tip because you're not just buying a car or a truck for your business that you need anyway. Now you're buying a vehicle that's creating cash flow.

Yeah.

Much, much smarter move. Yeah. All right, so I guess we go to the Lectric now. Get to my article. Look at the seven rules of thumb. When you start to look at this relationship between mileage and actual the write offs, there's some tables in there that really tell you what the write off you could expect. Meet with your tax advisor in the next two weeks. Run the numbers. Is it going to help you in your business or not? If your business is already at a loss, chasing this is not going to be a good deal. You're making 50, 100, 150 grand. You're like, hey, I need a new vehicle anyway, which I liked what you said, Matt. Look at the next three months. And dealerships right now are throwing out a lot of incentives before year end. They want to get cars off that lot. And you might even be able to get a 20, 24 model at year end.

Let's talk about electric vehicles. Those are obviously getting popular on the road today, whether it's a Tesla or any other.

You've done a lot of research on this too.

I've done a lot of research on it. My wife has a Tesla. I've been looking at a new car for myself. I've been deciding whether I want to go electric or not. Boogie woogie.

I think Matt's going with the Leaf.

Yeah. Myself as a Nissan Leaf driver, I think that was Mark Kohler that owned the Nissan Leaf. This is Mark. We lived in California. He's like, dude, I got to get the HOV lane. It's crazy out here. That was Mark's ticket to the hov. What did you get that. That charge would get you like 20 miles.

Yeah, yeah. I was like, I can go to the next exit. Charging. Charging. Now this is back in the early days of electric.

A little early electric.

They've.

They've come a long way.

They had little. I open up the trunk, there's little gerbils on a wheel.

Yeah.

Just like trying to charge the engine. It was. It was a nice thing.

Yeah, yeah. That didn't actually have like the punch that the Teslas have for some of these evs now that are like, you hit that gas and it's like, hold on for dear life.

It's like, yeah, yeah. It's like if you're the tilt, a whirl, you know, my wife has the

Tesla Model X and you hit that thing, it is like, hold on. Like, if I'm not, I've, like, hit it. And like, people in the car like, holy, dude, you gotta give us warning when you do that. I'm like, hey, you know, smoke them if you got them. You know what I mean?

Ride with the top down if you got a convertible.

Okay, well, let's get into the EVs because these are certainly popular right now, and there's some changes going on. There's actually news right now in the last week about the Tesla Model 3. This is like the second most popular EV on the road. It's the affordable Tesla $7,500 tax credit. There's a $7,500. That's the maximum tax credit you can get for buying an ev. Now, this can be for personal or business use. This doesn't even have to be used in your business. There is a EV credit, $7,500 tax credit, not deduction. It's going to reduce your federal income dollar for dollar, up to 7,500 bucks to purchase. Going to talk about how that works.

Yeah, there's some catches.

We'll come to that.

Sounds good.

Right now we got their attention because it works for a lot of people, though. Still right now, The Tesla Model 3, the Biden administration has said, nope, doesn't get the 7500 deduction anymore. We're cutting that to 3750.

But they love Elon. They're.

The Biden administration loves Elon. Oh, yeah, they love Elon. This is kind of. They're like, let's stick it to Elon here. So here's what's going on, because the Biden administration is like this economic war with China right now, right? And they're. They got all these competing priorities. They love saving the environment, electric vehicles, so they say. But they're also in this economic war with China. And so they're saying, hey, if we're going to give you a federal tax credit on an ev, we're not going to let it have minerals or components coming out of China. Well, just spoiler alert. A lot of electric components are coming out of China for most EV vehicles. And so Tesla's like, we can't build electric vehicles fast enough to meet our demand without sourcing some of our stuff out of China. We're going to, the Biden administration said great for you, but we're going to cut the EV credit, the 7500 down to a max of 3750 for the Tesla Model 3. Because it doesn't it because of this number amount of components coming out of China.

Yeah.

So now you want to go to fuel economy.gov that is the number one site that'll list what cars qualify and how much for the EV credit. It's a, it's a moving target even throughout the year because of this sourcing issue of where they get in their components. For is this full tax credit partial or no tax credit at all? Is it an ev like let's say it's the Tesla Model S or something. Or that's like, well, that's too expensive. They don't give you a tax credit for that. So there's a little nuance to that. Make sure you know which ones qualify. Don't just think any EV is going to qualify.

Yeah. And the number of vehicles sold of that make and model will also affect.

Well, that's changed. No, for this year though. They changed that. Yeah, for this year. To say that was the old rule because that, you know, there's like this moving target where it's like, oh, that this model qualifies. Well, not anymore. They've already sold this many models, it doesn't qualify. So in 2023, they've killed that.

Oh, that's right.

That's right. Yeah, they got rid of that.

There's so many moving parts to this

and they, but there was a catch though, when they got rid of that.

Oh, and here's the catch. Yeah. The catch is if you make too much money, you don't get the credit. So instead of penalizing the number of cars sold, they penalize the people buying.

Yes, this is be a Biden tax move. I hate to say, I mean, make me a partisan, but they're like, well, why, why are we going to cap them out? Let's cap the high income earners. So if you 300,000 or more married, filing Joy or 150,000 or more single, you do not qualify for this tax credit for the EV purchase.

And that's for personal use. We've got a loophole here for you.

We'll come to the loophole for commercial use because there's a commercial EV credit for business owners without an income restriction. But if you're just buying it for personal, remember it's the max $7,500 tax credit. This is for new. If it's a used, the max credit is four grand. So you can still get used. And actually the income limits go down even more.

So you.

I think it's like it was in half actually. 150 married filing joints, 75,000 single. So. But that's if you're buying a used EV. But that's still cool. There is a tax cut up to four grand. It's better than nothing. I'm just saying this is real money here. They're throwing this. That's a benefit. And so if you're like. And you know, even these electric vehicles, the gas mileage benefits and you know, saving the environment, whatever is important to you, I mean they've come a long way right now. So this is I think a still really cool incentive. Make sure you're picking this up and know about it if you're out in the west electric vehicle market.

And I'm still surprised the credits around it all because I Tesla's like, all right, they don't get the credit. We're still selling out. There's a wait list. So whatever. I'm still in line for my Tesla Cybertruck and I don't care if I get a credit or not. It's just kick ass.

Right? Yeah, exactly.

So.

But that tax credit's hanging there. Let's grab it, make sure you know about it so it's on your damn return.

I know. I want the cool electric motorcycle that goes in the back of the Tesla truck. You get to their the page. It is so cool looking. It's like futuristic. Little Tom Cruise action. Nice pop out of the Cybertruck.

Just like an accessory. Add the motorcycle.

Yes. And there's a camper section. You can add a trailer. It's all. It's pretty cool. It's pretty cool. I got to find a business use for that. Which brings us to that. So yeah, if you're like, I make too much money, I want this tax credit. And it does start to phase out. It's just not like a hard stop. So you start phasing out when you get close to those thresholds. So the business owners. Yeah. Do they have a problem?

Yeah. So let's say you make over these. This 300 grand. Married filing joint, 150,000 single. But you're like, guys, I'm going to use this electric in my business. And there are some electric trucks and there's, you know, our larger vehicles too. But what, what in the. They created a commercial electric Vehicle credit that business owners can take advantage of. So again, this is kind of going back to this actual uses, majority of the use, 50% or more for business. Now, if this is a auto under £14,000, the maximum credit is $7,500. But if it's over £14,000, I don't know what types of vehicles these are. Your maximum credit is $40,000.

Wow.

It is, again, a tax credit.

Yeah. Well, there's these new diesel trucks and delivery trucks.

Yes.

And, you know, there's buses, there's all sorts of things that are electric now and so.

Electric. Electric RVs.

I haven't seen one yet. I'm embarrassed. There probably is.

Yeah.

And I'm embarrassed to say. Well, there's got to probably be a sprinter electric.

Yeah, for sure. Class B, I bet.

Yeah.

So don't. So if you're going the electric route, the bottom line is there is this commercial credit. Look into it. Make sure again you're getting the autos that qualify. This the best way to look. Again, the best site. Fuel economy.gov. i'm just going to make sure I got it right now, but that'll give you the list of the current qualifying vehicles.

Go.

Fuel economy.

Which one do you like best? On there, you're going Tesla.

We've got the list here. I like the Chrysler Pacifica. Great little minivan, you know, vibe. I think it's a mini.

I don't know. Throw some car seats in.

You could do a Lincoln Aviators. Qualifying for the $75 tax credit. The Nissan Leaf's only 3752. 3750. That one's yours. So it's you. You.

Oh, thanks.

You owned it. Literally.

You know, I had to own it, but then I got rid of it,

you know, and so. But even like the Model X long range is in here, which is surprising. The Y, the Model Y for Tesla is the most popular EV out there. I was surprised to see that the Volkswagen IDs the BMW X5 drive 50E. I mean, there's a Cadillac qualifying Chevy Silverado truck down to Chevy bolts. These are all. I mean, these are $75 tax credits. Excellent list here to just go.

And I think Tesla's nailed it is they just make electric cars look cool. It's like the Chevy comes out with electric vehicle and you're like, I don't want to drive that.

Yeah.

Why couldn't. If you put that in a body style that like, exactly. Like it doesn't look like my grandma's driving.

Yeah.

You know, holy crap.

They're making cars that like for the Jetsons rather than real life. It's like, what the hell? This looks ridiculous.

It's crazy. All right, well, everybody, hopefully if you found a golden nugget in this somewhere, because there is a lot of opportunity here, a lot of mining for gold going on. You've got three weeks left. It's a great time to do some of your planning for the upcoming year and harvest a write off. Now. So if you're one of those 50 million Americans that have a side hustle, side gig or small business, with or without employees, this is an opportunity for planning. And again, you could do this transaction with no money down and still harvest a write off before year end and then create some efficiency. Be economical. Don't chase a deduction that doesn't make good economic sense.

Yeah, but if you do need an auto, why not get it now before your head?

Yeah, put a little bow on it.

Sweetener to get you over the edge. Remember, these tax incentives are real and they can really help on your tax return. Help you save money and keep more of that hard earned dollars you're doing because you're out there working so hard trying to build wealth, you know, employ people, provide a service or goods to your customers. Just get a little tax deduction. I just make a little sweetener for you.

I love it. I love it. Well, thanks everybody for listening. Please share this with any friends of yours that have a small business or are in the market for a vehicle. We appreciate the five star reviews, the shares on your social media. There's not many podcasts out there at all that approach this topic in a fun way. Breaking it down in a simple format. We get so many great comments and reviews. So we'll make you look good. We won't let you down. So please share.

Yeah, give this to your car salesman too. I think that could be our great. They could be our ourselves people. They should be dropping this podcast to people that come in. They're looking at a truck. You want a business. Have you listened to the Main street business podcast?

I was in a chevy commercial about 10 years ago.

That's right, you were.

Yeah.

General Motors, Chevy or whatever.

They called me up and said, we

need you to have the clip of that. We've got to pull that out. Yeah, it's Mark Kohler doing a video for. It was like, I thought it was like, was it Chevy or General Motors, like fleet vehicles, like division? It's got Mark Kohler on there doing a little tax incentive on why you should buy it. It's pretty cool.

It was pretty fun. You'd see that some truck stops here and there and.

Yeah, where did that play?

I got a Super Bowl.

Was that their super bowl at or.

I got some. No, it was. Yeah, but it was year end. Yeah, I got some good, you know, some pancakes, eggs and bacon. Grand slams, you know, some of the truck stops. You guys okay?

Oh, the guy from the.

Yeah, yeah.

From the commercials. Yeah.

Got to break the pretty right of that. Well, anyway, thanks everybody. Have a great holiday season and we'll see you next week with another year end tip and breaking it down.