Starting LLC to get $7500 business tax incentives

[Cybertruck 1974]

how is it possible?

Own a business, and have an accountant that knows about sec 179.

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[aswa]

Own a business, and have an accountant that knows about sec 179.

do you have CB or CT? CYBERTRUCK OR BEAST?

 

[mongo]

Own a business, and have an accountant that knows about sec 179.

That's 77k against income though, not tax. Correct?

Edit: or was it 100% depreciation on a FS Beast combined with a really high tax rate?

 

[PungoteagueDave]

That's 77k against income though, not tax. Correct?

Edit: or was it 100% depreciation on a FS Beast combined with a really high tax rate?

No one has a tax rate that high. Max Federal income tax rate in 2024/25 is 37%.

 

[mongo]

No one has a tax rate that high. Max Federal income tax rate in 2024/25 is 37%.

Then add in self employment (15.3%), state (13.3% max for CA), and possibly city. That's 65.6%. (Ignoring self-employment tax deduction)

120k + 7% sales tax = 128.4k
77k/128.4k = 60%
So it's possible.

 

[jimmylee0214]

No, you are mistaken. Even if you establish an LLC or a sole proprietorship, you must have income to benefit from the tax credit. The business tax credit does not apply to the purchase MSRP like it does for personal purchases. The credit is applied at the end of the year, and if your business income is insufficient to result in tax liability of more than $7,500, you will not less than . Additionally, the credit can carry over to the following year if you do not utilize it.

 

[PungoteagueDave]

Then add in self employment (15.3%), state (13.3% max for CA), and possibly city. That's 65.6%. (Ignoring self-employment tax deduction)

120k + 7% sales tax = 128.4k
77k/128.4k = 60%
So it's possible.

But unlikely, and exaggerated because the self-employment tax deduction is real. SALT can also complicate the situation. And I wouldn’t use CA as relevant to the country. In FL I pay no state or local income tax, and in Maryland, where I have a couple businesses and a second home, so must file, it’s still only 5.75% plus a county over-ride of 2-3.5%. What a f’ed up tax code we have - and it is only getting worse. My wife and I are both non-practicing CPA’s and the one thing we know when filing is that despite every effort to comply, the return has errors - carry back and carry forward rules constantly changing, required or non-required elections and statement attachments - virtually impossible to keep up with or do everything correctly when you have a few K-1’s and Schedule C, F or LLC businesses, as we do. My return is over 400 pages and expanding despite attempts at personal business simplification…

 

[NICKEM]

7500, nope, but i got 77k back against income tax! Winner!!

take the whole cost as deprecation assuming it is all business.

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