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chris886 OP t1_jaa8m1r wrote

Reply to comment by DeluxeXL in Taxes for a small business that I don’t plan on drawing income from? by chris886

Ok thanks. So whatever the business profits, I profit, and owe taxes on.

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Knipfty t1_jaaluq4 wrote

But you need to have some payroll. No business runs without human input. So you need to take a reasonable salary.

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DeluxeXL t1_jaaool4 wrote

>So you need to take a reasonable salary.

For S corp and C corp yes.

For sole prop and disregarded entity, doesn't matter.

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Thisismypasswprd t1_jaaat3i wrote

Yes and if the business spends its revenue then it didn't make any profit to be taxed on. Maybe your existing car is now the business vehicle ... etc

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chris886 OP t1_jaab39c wrote

Yep yep. Definitely going to be vetting out the deductions game for all it's worth!

Thanks.

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shadow_chance t1_jaaiwgl wrote

To be clear, your primary vehicle doesn't magically become a business vehicle that suddenly is saving you 100% on your taxes. You can deduct the use of your vehicle that is used on the business.

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chris886 OP t1_jaaktxg wrote

Lol, yes I did figure it was for just the business use. That’d be nice though right!

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Thisismypasswprd t1_jaal8ah wrote

The business can also buy it. There are different ways to go about this... I just wanted to paint a picture. Any more info and I'd have to start charging consultant fees

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shadow_chance t1_jaallmr wrote

And it's still limited to business use the % you can deduct.

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Thisismypasswprd t1_jaamgv4 wrote

I keep my work vehicle separate but yes it's all relative. The business would want to buy it to write off the depreciating asset that an individual cannot do

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vettewiz t1_jaacifc wrote

Remember the big tax savings, depreciation of the property.

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chris886 OP t1_jaacqgg wrote

Doesn't property value appreciate though, generally speaking?

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vettewiz t1_jaad1iv wrote

Not until you sell it. On a given year, you will deduct the purchase price of the property (minus land value), divided by 17.5 I believe. IRS uses a depreciation schedule of 17.5 years for real property.

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