Kubota a Tax deduction?

[Agrantina]

Question? I bought a new Kubota this year and wondering if this is a tax deduction as a big ticket item? Not a real farmer- just a want to be.. Anyone know the tax laws and deductions for 2010?

AndyG

 

[smstonypoint]

I am afraid you are out of luck. It would take a business & business income to qualify for Section 179 or depreciation.

Steve

 

[Agrantina]

---Accounting for big-ticket items
There's also another add-on, and it could be quite sizable. Sales taxes you paid on the purchase of motor vehicles, boats, aircraft and, in some cases, building materials for a substantial addition to or renovation of an existing structure can be counted on top of your sales tax table and local tax amounts---

I would think that a 16k tractor I could deduct the sale tax that I paid..Just like other big ticket items??

AndyG

 

[LD1]

Yes you can deduct the sales tax if you itemize. But unless you saved ALL of your recieps through out the year, it will revert back to a standardized amount which will probabally be more than whatever reciepts you can come up with.

I plow snow commercially. Mostly with my truck and plow. But since I "sometimes" use the tractor to make income (that I claim as business), then it is tax deductable.

Aside from the sales tax I mentioned, Unless you are using your tractor to make money (and then claiming that money as income) then you cannot deduct anything else.

If you do decide to use it for profit with the intent of claiming it as income, you can also write off other expences like part of the building it is stored in, electric and heat to that said building, etc. But if you decide to have a "business" and file a schedule C (I think), consult a tax advisor at least for the first year to find out what you can and cannot claim.

 

[Agrantina]

Thanks- I may go that route in 2011 amazing what people want you to do once they find you have a tractor.... I have been keeping reciepts for the past several years and it DOES help if you are willing to keep up with all of it. I figured that I could use that tractor sales tax--$1200 as a deduction on my taxes this year also.. Every little bit helps!!!!

AndyG

 

[LD1]

Thanks- I may go that route in 2011 amazing what people want you to do once they find you have a tractor.... I have been keeping reciepts for the past several years and it DOES help if you are willing to keep up with all of it. I figured that I could use that tractor sales tax--$1200 as a deduction on my taxes this year also.. Every little bit helps!!!!

AndyG

It would still probabally be worth the money to pay a tax advisor.

Yes, with the purchase of the tractor you will probabally go over the standardized sales tax amount. But will it go over your state and local income tax amount????

According to the IRS, you can only deduct 1 of either your income taxes OR sales taxes. So...if you paid more in state and local income taxes, than you cannot claim ANY sales taxes.

Om my return last year, that amounted to over 2k for me and right about 1k for the wife. No WAY would we have been able to come up with reciepts of 3k. @ 7% sales tax, we would have had to spend over 42 grand.

But every states income taxes are different and everyones income is different. But It would be worth looking into for you.

ALSO, someone else may know, as I dont, but if you finance everything, can you even claim ALL of the tax???

Here is a link Sales Tax Deduction Calculator

 

[woodchuckie]

My farm is actually timber land and the year I bought the tractor I used section 179. Claimed it as an expense for producing income as in timber like site prep cost and replanting cost. I built and maintain a series of trails (fire lanes) which give me access to it. I deducted the entire 13 thousand or so and am taking depreciation on it for seven years just like the planting expenses.

 

[smstonypoint]

My farm is actually timber land and the year I bought the tractor I used section 179. Claimed it as an expense for producing income as in timber like site prep cost and replanting cost. I built and maintain a series of trails (fire lanes) which give me access to it. I deducted the entire 13 thousand or so and am taking depreciation on it for seven years just like the planting expenses.

I'm confused by your wording. What is included in the $13K?

Steve

 

[Thomas]

I check into it last year,simple put to me was..are you charging for your service/paying taxes,also reg. w/state plate on the back,than yes.

With new taxes laws you may want to check closer.

 

[D33r3 6r33N]

My wife and I hand our stuff to the accountant every year and let them handle it. I mow a few yards and my wife does transcriptions and cleaning and sells a few antiques, besides our regular jobs. I figure it's worth it for us not to have the headache of dealing with it.

 

[Agrantina]

I thought (might be the problem) is that I can use all my sales tax--including big ticket items in my deductions? So it would be all general everyday sales tax on things I buy and also use the sales tax on the tractor as a deduction. In the part of TN I am in we have 9.25% sales tax. Will do more checking into but some years ago I bought my RV and used the sales tax from it on the itemized deduction... any other words of knowledge would be helpful...

AndyG

 

[JakeBrake]

I thought (might be the problem) is that I can use all my sales tax--including big ticket items in my deductions? So it would be all general everyday sales tax on things I buy and also use the sales tax on the tractor as a deduction. In the part of TN I am in we have 9.25% sales tax. Will do more checking into but some years ago I bought my RV and used the sales tax from it on the itemized deduction... any other words of knowledge would be helpful...

AndyG

Farmers use income tax schedule "F" to account for profit and loss from farming. basic Turbotax will step you right through it, including depreciation on your tractor and other equipment. The trouble is you have to show a profit in three out of five years or you will be reclassified as a "hobby farmer" which means your deductions can only equal your profit. In other words - no deduction.

 

[Agrantina]

JakeB- If someone uses the $2k of sales tax they paid when they bought a new car as a sales tax deduction. Why cant I simply do the same with the sales tax that I paid (about 1200.00) on the tractor? I beleive if you can use Boats, cars, RVs and other motorized vechiles sales taxes as -big ticket items-then I can use the tractor the same way. I am not trying to use the total amount of what I paid for the tractor as a deduction as you would in a business just the sales tax I paid... I looked into it today-have more checking to do- but I beleive I can...

AndyG

 

[LD1]

JakeB- If someone uses the $2k of sales tax they paid when they bought a new car as a sales tax deduction. Why cant I simply do the same with the sales tax that I paid (about 1200.00) on the tractor? I beleive if you can use Boats, cars, RVs and other motorized vechiles sales taxes as -big ticket items-then I can use the tractor the same way. I am not trying to use the total amount of what I paid for the tractor as a deduction as you would in a business just the sales tax I paid... I looked into it today-have more checking to do- but I beleive I can...

AndyG

You CAN use the sales tax as a deduction for ALL purchases you made if you have reciepts to show for them. This incudes more than just major purchases. Things like eatting out, trips to walmart, lowes, whereever. All can be deducted.

BUT unless you paid more in state and local sales taxes than state and local income taxes, you are foolish to claim the sales tax. Because you can only claim one or the other. In most peoples cases, they pay more in income taxes than sales taxes.

 

[Agrantina]

Thanks LD-- we dont have state tax in TN, so I will just have to do the math and see which one works the best... When I bought sold and bought another RV (years ago) it worked out better to use that sales tax-- becuz all that was done in the same year... Might help me this year with the tractor???? I guess one day I will hire someone to do it? But for now I just spend all Jan-Feb learning about the tax laws what I can do--Fun Fun...:confused2: :confused2:

AndyG

 

[LD1]

Thanks LD-- we dont have state tax in TN, so I will just have to do the math and see which one works the best... When I bought sold and bought another RV (years ago) it worked out better to use that sales tax-- becuz all that was done in the same year... Might help me this year with the tractor???? I guess one day I will hire someone to do it? But for now I just spend all Jan-Feb learning about the tax laws what I can do--Fun Fun...:confused2: :confused2:

AndyG

IMO a tax preparer is well worth the money. My guy charges me $120. It would cost me $80 to file online with turbotax. It only takes him an hour and I can assure you he saves me MORE than the $40 difference.

 

[TripleR]

IMO a tax preparer is well worth the money. My guy charges me $120. It would cost me $80 to file online with turbotax. It only takes him an hour and I can assure you he saves me MORE than the $40 difference.

We did our own for many, many years, but when we started using an accountant, we came out much better. Ours finally became too complicated, but wish we had done it earlier; depends on your situation.

 

[LD1]

We did our own for many, many years, but when we started using an accountant, we came out much better. Ours finally became too complicated, but wish we had done it earlier; depends on your situation.

I used to do mine too when they were simple. 1 W2, No house, no major write-offs.

But then I bought a house, got married, had kids, Plow snow and get 1099'ed, sell wood, etc. A good tax pro is well worth the little bit they charge IMO

 

[LD1]

On a side note, last year I tried to do my taxes online with TurboTax. I have had my tax guy do it for the last 3 so I had my preious returns to use as a guide. Going through all the steps with the "deduction maximizer" etc, and check and recheck, and going as far as I could without actually filing, turbotax wanted 79.99. My $120 tax guy retrned me about $300 more than TT. Nuf said. He will be doing my taxes again this year.

 

[TripleR]

On a side note, last year I tried to do my taxes online with TurboTax. I have had my tax guy do it for the last 3 so I had my preious returns to use as a guide. Going through all the steps with the "deduction maximizer" etc, and check and recheck, and going as far as I could without actually filing, turbotax wanted 79.99. My $120 tax guy retrned me about $300 more than TT. Nuf said. He will be doing my taxes again this year.

Yeah, we used TT for a long time and for a long time it worked well, but like you as things got more complicated, it just was not worth the hassles. You don't need a lot of income to benefit from a professional. Even if it cost me more than I got back, my sanity is worth the little extra money.