Podcast Summary
Monetizing underutilized assets with Airbnb: Explore side hustles like hosting on Airbnb, research tax hacks, and fact-check financial advice
Monetizing underutilized assets, such as hosting a spare room on Airbnb, can be an easy and effective side hustle. The speaker, Nicole Lappin, shared her personal experience of writing in remote cabins while also hosting on Airbnb to generate income. She emphasized that this side hustle is accessible to anyone, as Airbnb makes it easy to get started. Additionally, she encouraged listeners to explore other tax hacks, such as bonus deductions for heavy SUVs under Section 179 of the tax code. However, she cautioned against relying on financial advice without fact-checking, as some information may not be based on truth. Overall, the key takeaway is that there are various ways to generate income and save money, and it's essential to do thorough research before implementing any financial strategies.
Tax deduction for business asset purchases: Businesses can save on taxes by depreciating qualifying asset costs over time, with larger savings from year-end purchases
Businesses can take advantage of Section 179 of the US tax code to depreciate the cost of qualifying assets over a certain period of time, reducing their taxable income. This tax break is particularly beneficial for large purchases made before the end of the year. For instance, if a business owner buys an SUV worth between £1,000 and £14,000, they can fully depreciate the cost in the first year. Depreciation refers to the decrease in value of an asset over time, and the government allows businesses to write off a percentage of this depreciation each year as a tax deduction. So, for a £2,000 camera, which falls under the 5-year depreciation class, a business owner can write off £400 per year for five years. This means significant tax savings for businesses making eligible purchases before the end of the year.
Tax deductions for business purchases are decreasing, but cars bought and used by end of 2023 can still qualify for significant write-offs.: Businesses can still write off up to 80% of car purchases made and put into use by end of 2023, but there are limits and specific requirements to qualify for this benefit.
Businesses can still take advantage of significant tax deductions for certain purchases made before the end of 2023, but the amount that can be written off is decreasing each year. The Tax Cuts and Jobs Act of 2017 allowed for 100% write-off of depreciating assets in the first year, but this benefit is being phased out. For cars specifically, there's a common misconception that any car bought in 2023 can be written off 100%, but this is not the case. To qualify for the full 80% write-off, the purchase must be made and put into use by the end of 2023. Additionally, there are limits to how much can be written off for a car, which may be less than the cost of some luxury vehicles, such as a G Wagon, that are commonly associated with this tax move. Eligible vehicles include those with a cost over £6,000 and under £14,000, and examples include the Land Rover, Range Rover, Cadillac Escalade, Porsche Cayenne, and G Wagon. Overall, it's important for businesses to understand the specifics of these tax deductions and act accordingly to maximize their benefits.
Car Write-offs: More Complex Than You Think: Business owners can't write off full car cost, only a percentage based on business usage. Use apps to track usage and consult tax professionals for IRS compliance.
While it may be tempting to believe that you can write off the full cost of a new car as a business expense, the reality is much more complex. The IRS allows for a limit on how much of a car's cost can be written off as a depreciating business asset, but there are specific requirements and exceptions to this limit. For example, a car must seat 9 people or have a cargo area of over 6 feet to qualify for the full write-off. For most business owners, the percentage of time their car is used strictly for business purposes will be less than 100%, meaning they can only write off that percentage of the car's cost. Using apps to track business usage can help determine this percentage. Ultimately, it's important to consult with a tax professional to navigate the complexities of car write-offs and ensure compliance with IRS regulations.
Tax-deductible car branding strategies: Cost of car wrap and signs are tax-deductible, low-key branding like hats and t-shirts also deductible, consider cost-effective alternatives for car advertising
While getting a car wrapped for business purposes can be a tax-deductible marketing strategy, it's important to remember that not all driving expenses are deductible. The cost of the wrap or sign is tax-deductible, and even low-key branding like hats or t-shirts can also be deducted. An example of successful car branding is Bethenny Frankel's promotion of her Skinnygirl cocktail brand. However, wrapping an entire car might not be suitable for everyone. Instead, consider these options as effective and more cost-efficient ways to advertise your business. Remember, Money Rehab is here to help answer your money-related questions. If you have any, email us at money rehab at money news network dot com or follow us on Instagram at money news and TikTok at money news network for more exclusive content. Lastly, thank you for tuning in and investing in yourself, the most valuable investment you can make.
