Tax writeoff on Van for business use?

**billsnogo** · 10-20-2006, 01:04 PM

First of all, sorry if this is in the wrong area, or if this should even be on this site, but you are the only plumbers I know of other than my instructor.

Anywho, I am thinking about applying to get accepted into a union apprenticeship, but they require you supply your own vehicle.

Not a huge deal, but I am worried a little since I would want a low milage vehicle to be a little more reliable and make sure I make it to the job sites on time every day, that would require me to take out an out loan. I also assume that a van would be needed to carry my tools, so they are not exactly fuel friendly.

So with the cost of the auto loan and fuel, I am worried if I should just stick with looking for work in non-union shops, unless the tax writeoffs are worth it, and if I can claim it since I am an employee rather than a business owner.

I have looked so far, and the IRS site says you can do a milage writeoff of something like .40 a mile, so assuming I do 10,000 miles on the vehicle, that would be a $4,000 deductible. Now does that mean I will pay the IRS $4000 less each year? For an assumption, lets say I pay in $6K to the IRS, with the $4000 deduction will I only owe them $2k, or will they let me only take part of the deduction.

I know you guys are plumbers and most likely have had your accountants deal with this mumbo jumbo, but just in case someone has had a good chat with there accountant and know what the low down is, could you share?......please?

(I know, I know, I ask alot of silly questions)

**Mikey** · 10-20-2006, 01:27 PM

Depends on how you file your taxes. Best case is that you will be able to both depreciate your van, tools, etc. (I think the term is "income-producing assets"), and deduct operating costs from the income stream(s) those assets produce. Worst case is it won't be deductible at all. As the newspaper tax-advice columns say, "Consult your tax adviser."

Mike
(who knows even less about tax law than he does about plumbing)

**jadnashua** · 10-20-2006, 02:31 PM

The $4K comes off of your taxable income, so you'd pay taxes on $4K less. If you were in say the 25% bracket, you'd save $1K (4000*.25).

**toolaholic** · 10-20-2006, 02:31 PM

keeeep looking. an apprentice supplys a good attitude and his own lunch

**master plumber mark** · 10-20-2006, 02:48 PM

this sounds like one of those

"school of hard knocks" choices you
have to make yourself...

if you are gonig to
take a "leap of faith" and trust these fellows
to give you your job

you had better be darn sure that you
will have it long enough to make this investment
is feasable.......

yremember--you are placeing your trust in total strangers.
makeing promises to you they dont have to keep...

and maybe they get their kicks screwing over young
apprentices like this every month...

just my opinion.

**Mike Swearingen** · 10-20-2006, 04:06 PM

I would think that your employer would need a van to carry larger tools and supplies, not you. You probably shouldn't be concerned with anything but personal hand tools and equipment that will fit in almost any vehicle.
Mike

**molo** · 10-20-2006, 04:11 PM

I know a plumbing/heating guy who had his own business for years. He decided to go union (i'm sure he's not an apprentice). He raves about the union work and benefits.
Note: He's the only union plumber i know. It would be interesting to see a thread comparing self-employment to union employment

Molo,

**jimbo** · 10-20-2006, 04:58 PM

Check with a good tax guy. If you are a salaried employee, certain employee business expenses are only deductible above a floor of about $2000. Mileage may be different. If you want to do your own taxes, turbotax is the way to go.

If your employer treats you as a 1099 ( probably not really OK with the IRS) then you are self-employed, and there are a lot more deductions available, but also the 7½% ss AND the 7½% self employment tax.

**dubldare** · 10-20-2006, 05:16 PM

Everyone except foremen on our commercial jobs use their own vehicles, for their own personal transport only. Now that may only be to the shop to catch a ride in a company vehicle, or driving yourself from home to a site. With the exception of transporting one's self, your vehicle would not be for work, and as such not a deductible expense.

Additionally, by our contract up here, all tools and equipment must be funished by the employer. Our contract forbids the use of any personal tools or equipment, and we could be reprimanded for doing so. I do use my own personal small hand tools, and carry some of my test equipment with me, but then I do have a take-home vehicle. On job sites, the tools will generally be kept in gang boxes or trailers.

So for the most part, you'd probably just have to bring your lunch to work.

**billsnogo** · 10-20-2006, 07:18 PM

Thanks guys, that helps. Nice to know if I do get a car loan, I could use a car for my transportation, something with a 4cyl or 6cyl to help a little on the gas milage.

Thanks dbldare, when I applied last year with the union, they left out those details.

thanks again!

hj · 10-20-2006, 08:31 PM

One thing to check with an accountant. At one time the mileage from your home to the first stop of the day, whether a jobsite or the office was not deductible. Not sure if it is the same way now, because my home is my office and the vehicle is strictly used for business anyway.

**kordts** · 10-20-2006, 08:55 PM

What union local is this? Our local forbids this kind of stuff. We are required to show up to work with channellocks, tape measure and torpedo level. Everything else is supplied by the contractor. As far as a vehicles goes, they don't even bust your chops for driving an import anymore. But they don't care if you drive or walk to the job, much less require a van. It doesn't make sense that they would require you to provide a van and tools, that expense could tempt you into siders, cutting into their market share.

**Cal** · 10-21-2006, 04:02 AM

Screw THAT !!! Minn. gotta be COLD AS HELL for most of the year !

Come on down to No. Virginia !!! We could use about 10,000 good apprentices and it's a "Right to work state"

Oh yeah , Bring your truck and tools.

Cal

hj · 10-21-2006, 07:43 AM

No. Virginia? Is that located above VA and West VA? I can't find it on a map, so highways may not go to it. No wonder you need so many apprentices, no one can find the state.

**billsnogo** · 10-21-2006, 10:44 AM

Sorry, staying in Minnesota, at least for another ten years

. If you grow up here, the cold is just normal, if your not from around here, your in for a surprise

I still rather not get an import if possible, at least yet. Just nice to know I can get a four banger contour, or six cylinder Monte Carlo. Something that does not require me to go to the pump once a day, I get enough of that with the old nova.

It is Minneapolis Plumbers Union 15, and they did not mention the details for the tools, so I was unsure and didn't want to waste there time applying if I could not swing the cost with the vehicle. Currently in a four year plumbing class for non-union training, but need to find my own work with that and I am not so sure how easy it will be to find work as a first year apprentice, and with the union (hard to get into!) that part is taken care of, if I get accepted that is.

Well, thanks again guys