New LLC, Tax write off's, and Decals

[Yambers]

All, I recently posted that I bought a new tractor to play with. We have decided to make a side business of it so we went and created an LLC and all the jazz that goes with it. I have a couple of questions for the experts.

1. I researched tax write offs. I am certain I understand most of it, but my question surrounds my truck. It is used partially for personal and partially for business. I have read that if I have stickers or decals from the business on it, essentially using it as a rolling billboard or marketing tool, that I can depreciate all of it (either at once or scheduled). Anyone else done this?

2. We are also utilizing youtube for the business. On the channel we will also do boat projects. If the boat has the work decals on it as well, and it is on the channel dedicated to our business, isnt that considered marketing and can be written off as well?

3. Anyone make these type of decals and are willing to work with me and take our logo and contact info and make some graphics for us? We will pay of course. Not lookin for favors, just the experts in decals.

 

[AZMark]

All, I recently posted that I bought a new tractor to play with. We have decided to make a side business of it so we went and created an LLC and all the jazz that goes with it. I have a couple of questions for the experts.

1. I researched tax write offs. I am certain I understand most of it, but my question surrounds my truck. It is used partially for personal and partially for business. I have read that if I have stickers or decals from the business on it, essentially using it as a rolling billboard or marketing tool, that I can depreciate all of it (either at once or scheduled). Anyone else done this?

2. We are also utilizing youtube for the business. On the channel we will also do boat projects. If the boat has the work decals on it as well, and it is on the channel dedicated to our business, isnt that considered marketing and can be written off as well?

3. Anyone make these type of decals and are willing to work with me and take our logo and contact info and make some graphics for us? We will pay of course. Not lookin for favors, just the experts in decals.

I think I’ve seen @jocolo21 talk about making graphics.

#2 seems like a stretch if you’re talking about depreciating your boat because it’s included in videos and has marketing stickers on it.

 

[Yambers]

I think I’ve seen @jocolo21 talk about making graphics.

#2 seems like a stretch if you’re talking about depreciating your boat because it’s included in videos and has marketing stickers on it.

Probably right. Dangit..

I can still do the truck though. Now just to get those graphics

 

[Bluewater272]

I’m not an expert, but I’m pretty sure you can’t just slap a sticker on your boat and write it off.

 

[Evil Sports]

My accountant said something years ago to me, is it reasonable and necessary? If so then your probably good with depreciation. That being said the answers are pretty clear. Some will depreciate everything and believe the $$ they save will still be more than the fines paid after and Audit. Im not in that camp and run my 2 companies as clean as possible. My boat has large Evil Sports logos on it and initially I was charging advertising expense to Evil, my accountant had a bird and said cut the sh!t. The truck can qualify but if they check you, you will need to be able to show what percent of business use vs personal.

 

[HangOutdoors]

Writing off your truck can be dicey especially if it is title in your name and you use it personally, I have been through audits and they are not fun. What I do is log all my miles and pay myself back pretax at the going mile rate of .56 cents per mile (in 2021) and keep accurate logs for my side businesses. Works out quite well and keeps me way above board. Just a thought.

Would check with your accountant to see how far he recommends you stretch it. There as some funky loopholes with the Jobs Act.

 

[drewkaree]

I have considered going this route, but I'm trying to figure out how to get off the ground and get on with the first step

 

[Yambers]

Well, no accountant, YET. We havent even done job #1. I am a classic over-thinker and while I wanna be 100% legal and reputable, I also dont wanna miss any profitable loopholes.

@Evil Sports what business do you operate with your boat?

 

[Yambers]

First, thanks for the replies and advise. New to business ownership and filled with questions.

And what about expenses? Anything that I purchase for the business can be written off, correct? I believe the cutoff for assets and expenses is $2500. So if I buy diesel, tractor implements, gloves, tools, etc. that are used for the business and are under $2500, I should be safe as an expense. The tractor and trailers will show depreciation. And I should just track miles for the truck and do whatever 2021 offers for reimbursement. Am I reading all that correctly?

 

[HangOutdoors]

@Yambers All depends on write offs and your business and how it is used as well as what can be attributable to COGS or services. I would suggest you perhaps get a consultation, which wouldn't be expensive with an experienced accountant in your industry and ask them all the questions take some good notes and they will let you know the ins and outs.

But, you have the general idea above. Also, since I would assume your year end will be Dec. of this year, watch you purchasing and try to put the smaller items and such into the new year to offset any revenue you will see next year.

 

[Yambers]

@Yambers All depends on write offs and your business and how it is used as well as what can be attributable to COGS or services. I would suggest you perhaps get a consultation, which wouldn't be expensive with an experienced accountant in your industry and ask them all the questions take some good notes and they will let you know the ins and outs.

But, you have the general idea above. Also, since I would assume your year end will be Dec. of this year, watch you purchasing and try to put the smaller items and such into the new year to offset any revenue you will see next year.

Thanks. I certainly dont wanna do anything illegal. And I do have purchases I am putting off since the major equipment was bought this year. Hoping to spread it out over a few years.

I was thinking about itemizing truck expenses. Probably tractor as well. Probably get a bigger break that way. I have to get accustomed to recording everything.

 

[Jim_in_Delaware]

I would suggest that you consult a local tax expert. While other business owners on this forum may be able to give you advise regarding IRS rules, you also need to make sure you don't run afoul of your state tax rules as well. In addition, there may even be state tax credits available that you may not be aware of.

Jim

 

[mrcleanr6]

You need to break your truck usage down as a percentage of use. How much is used for personal and how much for business. I use my corvette and my boat as a business expense BUT not the whole thing. I am also in the marine business so i can justify that. I dont remember what it was exactly but lets say to keep it simple its 50/50. If i use the boat and 50% of the time its for business then we are taking that 50% and breaking it up over say 5 years so my deduction is about 10% of the boat cost per year. In any case you would need to have a good explanation of how you use your boat for business other than just slapping a decal on it with the business name. Do you take clients out etc? No matter what it is your buying or claiming as a deduction you need to be able to say “i need this for the business”. If you can do that then its a deduction

 

[Yambers]

You need to break your truck usage down as a percentage of use. How much is used for personal and how much for business. I use my corvette and my boat as a business expense BUT not the whole thing. I am also in the marine business so i can justify that. I dont remember what it was exactly but lets say to keep it simple its 50/50. If i use the boat and 50% of the time its for business then we are taking that 50% and breaking it up over say 5 years so my deduction is about 10% of the boat cost per year. In any case you would need to have a good explanation of how you use your boat for business other than just slapping a decal on it with the business name. Do you take clients out etc? No matter what it is your buying or claiming as a deduction you need to be able to say “i need this for the business”. If you can do that then its a deduction

Thanks for the advice. I was told that if I take anyone out, and they pay for gas, and it is on the youtube channel with the same name as the company, and I advertise on it, then that percentage can be deducted because I have chartered.. Gonna have to look into it further so I dont get in a legal mess. Not high on the priority list to write off part of the boat though.

 

[Jim_in_Delaware]

Just be careful about chartering your boat as this brings a set of requirements all by itself.

Jim

 

[mrcleanr6]

I dont know about that. You need to talk to a good accountant about that one to het all the specifics. Nothing wrong with someone on your boat paying for gas but you want to watch out being considered chartered. If you get into that then you need to have your captains license.

 

[Yambers]

I dont know about that. You need to talk to a good accountant about that one to het all the specifics. Nothing wrong with someone on your boat paying for gas but you want to watch out being considered chartered. If you get into that then you need to have your captains license.

Agreed.. will def look into it for legality reasons.

 

[PaulyB]

I dont know about that. You need to talk to a good accountant about that one to het all the specifics. Nothing wrong with someone on your boat paying for gas but you want to watch out being considered chartered. If you get into that then you need to have your captains license.

This is incorrect. You do not need a captain's license to charter your boat unless you are in waters controlled by the US coast guard. Inland lakes do not apply. You just need a commercial insurance policy with $1,000,000 in coverage.

 

[jocolo21]

I think I’ve seen @jocolo21 talk about making graphics.

#2 seems like a stretch if you’re talking about depreciating your boat because it’s included in videos and has marketing stickers on it.

Ive been making dirt bike atv and jetski graphics for 13 year, my first boat was wrapped and my logo always shows on my boat but i dont include it in my LLC as biz i do include milage on my truck.

 

[mrcleanr6]

This is incorrect. You do not need a captain's license to charter your boat unless you are in waters controlled by the US coast guard. Inland lakes do not apply. You just need a commercial insurance policy with $1,000,000 in coverage.

well sort of. the feds require you to have a license if you are for hire no matter where you are however the cg probably arent monitoring most state lakes. your capt lic actually needs and inland endorsement for all the lakes. each lake will be controlled/regulated by the state which its in so from state to state the requirements will or may vary. i see your in VA so if what you say is their requirements then thats fantastic. let not assume though what is good in VA will also fly in Indiana where yambers is from. they may have the same or similar rules to VA or they may follow the CG requirements. thats something that a person would have to look into in their state.