Aggregates Manager

December 2013

Aggregates Manager Digital Magazine

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Page 57 of 88

MONEYMATTERS RECREATING THE PRO PICKUP car for both business and personal purposes, you may deduct only the cost of its business use." "You can generally figure the amount of your deductible car expense using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, before choosing a method, you may want to figure your deduction both ways to see which gives you a larger deduction." Your tax accountant can help you decide on the specifics of the method that works best for you. PERSONAL OWNERSHIP What you need to know about using personal pickups for business – or company trucks for personal use A s outdoor enthusiasts, we see lots of company pickups being used for recreational purposes. Whether it's launching a boat at the ramp, towing a travel trailer into a campground or unloading ATVs at an ORV park, business vehicles are clearly being used for nonbusiness purposes. For those who operate their vehicles with a clearly defined distinction between company and personal use, I'm sure this can be quite upsetting. But company policies and the IRS make plenty of provision for this type of vehicle use. In fact, for us, it's one of the great benefits of owning a small business. It just happens that the capabilities of a properly equipped pickup truck make it functional for our business purposes and for our favorite recreational pursuits. If you work for a municipality 14 PROPICKUP December 2013 or other government agency, the policies are probably much more strict. I have a brother-in-law who absolutely will not use his stateowned pickup for any personal errands, even if we are running low on beer on game day. Your style as a business owner or fleet operator may also be to prefer prohibiting personal use of company vehicles. KNOWING THE TAX LAWS However, both small business owners and large companies can be well within the tax laws if they choose to make vehicles available for both personal and business use. Mixing personal and business use of the vehicle can be done from either side of the street. On the one hand, you can use a personal vehicle for business use, benefiting from the proper taxfree reimbursements. On the other hand you can set up a company vehicle to be used for personal transportation provided that proper recordkeeping accounts for the taxable benefits that an employee gets by using the company vehicle, which is considered to be part of their compensation. Here are some general guidelines from the IRS: "If you use your car in your job or business and you use it only for that purpose, you may deduct its entire cost of operation (subject to limits discussed later). However, if you use the For our small, family-owned business, we've always encouraged personal ownership of vehicles to be used also for business purposes. We try to keep them somewhat color coordinated, but beyond that it's up to the individual how they want to equip their pickup. My brother-in-law prefers to have his truck set up with a lift and oversize wheels and tires. He pays for these modifications knowing that he will only get the standard mileage reimbursement for the use of his truck even though his style cuts into fuel mileage and costs more for replacement tires. Others in our company prefer to make their modifications such as adding power steps, auxiliary lights, toolboxes, racks and winches. Many work trucks are being used for both work and personal use. The IRS says that's fine as long as good vehicle record keeping differentiates between the two.

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