Tax writeoff on Van for business use?

Discussion in 'Plumbing Forum, Professional & DIY Advice' started by billsnogo, Oct 20, 2006.

  1. billsnogo

    billsnogo wannabe plumber

    Messages:
    32
    Location:
    brooklyn park mn
    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)
  2. Mikey

    Mikey Aspiring Old Fart, EE, computer & networking geek

    Messages:
    2,736
    Location:
    Central Florida
    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)
  3. jadnashua

    jadnashua Retired Defense Industry Engineer xxx

    Messages:
    22,313
    Location:
    New England
    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).
  4. toolaholic

    toolaholic General Contractor Carpenter

    Messages:
    874
    Location:
    Marin Co. Ca.
    I don't believe this a leget. outfit

    keeeep looking. an apprentice supplys a good attitude and his own lunch
  5. smells fishey to me

    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.
    Last edited: Oct 20, 2006
  6. 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
  7. molo

    molo Member

    Messages:
    853
    Location:
    cold new york
    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,
  8. jimbo

    jimbo Plumber

    Messages:
    8,997
    Location:
    San Diego
    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.
  9. dubldare

    dubldare Plumber/Gasfitter

    Messages:
    286
    Location:
    MN/ND
    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.
  10. billsnogo

    billsnogo wannabe plumber

    Messages:
    32
    Location:
    brooklyn park mn
    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!
  11. hj

    hj Moderator & Master Plumber Staff Member

    Messages:
    27,237
    Location:
    Cave Creek, Arizona
    mileage

    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.
  12. kordts

    kordts In the Trades

    Messages:
    551
    Location:
    exurban Chicago
    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.
  13. Cal

    Cal New Member

    Messages:
    228
    Location:
    Northern Virginia
    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
  14. hj

    hj Moderator & Master Plumber Staff Member

    Messages:
    27,237
    Location:
    Cave Creek, Arizona
    Where?

    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.
  15. billsnogo

    billsnogo wannabe plumber

    Messages:
    32
    Location:
    brooklyn park mn
    Sorry, staying in Minnesota, at least for another ten years :p . If you grow up here, the cold is just normal, if your not from around here, your in for a surprise :eek:

    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.:eek:

    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 :D
    Last edited: Oct 21, 2006
  16. kordts

    kordts In the Trades

    Messages:
    551
    Location:
    exurban Chicago
    I am cornfuzed, does the union require you to have a vehicle to commute to work in, or a work vehicle?
  17. Cal

    Cal New Member

    Messages:
    228
    Location:
    Northern Virginia
    HJ,

    You know Northern Va . couple miles outside of Washington D.C.,,,, the place were every politician wants to wind up so they can " Work FOR the people" HA ,HA !!

    Theres LOTS of roads that lead here,problem is once the road gets NEAR here you can't see it UNDER ALL THE CARS !!!

    Waiting for someone to offer me a nice job in a nicer , relaxing part of the country !

    Cal
  18. toolaholic

    toolaholic General Contractor Carpenter

    Messages:
    874
    Location:
    Marin Co. Ca.
    Bill Go Down To The Hall At 7 Am

    Dress neat ,look people in the eye, ask for a handout with all the apprentice program details. look for FRIENDLY faces.

    If you want it go to the hall! they won't come to you !

    good luck tool
  19. markts30

    markts30 Commercial Plumber

    Messages:
    630
    Location:
    Phoenix, AZ
    The local you wish to join is UA Local 15...
    As a member of the UA - Local 469, the requirement for a vehicle is just for transportation....
    The UA does NOT require a work truck (AFAIK)- Our (Local 469) contract states the requirement for torpedo level, channel locks and tape as a minimum and also now (in the last year or so) includes an additional requirement of about $300-400 worth of hand tools to be obtained as soon as they can be afforded IF the employer is willing to pay $0.20/hr additional. If the employer does not wish to pay that, you don't have to supply them...
    That being said, I like having my own tools, whether or not required, as I know what is available and what quality it is...
    I suspect they just want to ensure that you do not rely on public transport which may not always be available when and where you need it to get to work...
    Last edited: Oct 23, 2006
  20. hj

    hj Moderator & Master Plumber Staff Member

    Messages:
    27,237
    Location:
    Cave Creek, Arizona
    469

    Must be in Phoenix.
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