Legal Question in Business Law in Illinois

A vehicle for my business

I've just started a new business. I'm about to file for an EIN to set up a bank account and establish credit. I was also going to purchase a vehicle because my new venture involves me traveling door-to-door and my personal car is about to die. I've been doing a lot of research on the net concerning small businesses. I ran across a site that said ''Consider the tax consequences of obtaining a vehicle. Did you know that if you purchase a vehicle, you may have to pay substantial excise taxes? Did you also know that there are certain tax breaks available to you if you buy an electric powered vehicle? And of course the major issue, if you use vehicles in your business, is keeping adequate records of your business usage. Before you obtain a vehicle for your business, be sure that you understand what it will mean for you when it's time to file your tax return'', is this true? Which would be smarter to do buy or lease? Instead of the vehicle being a write-off, will I be paying more tax?

Please advise.

Thanks.

[email protected]


Asked on 4/17/02, 10:06 pm

1 Answer from Attorneys
Kenneth J. Ashman Ashman Law Offices, LLC

Re: A vehicle for my business

Depending upon how you set up your business, it may not make a tax difference in whose name the vehicle is owned. For example, if you personally owned your vehicle, but used a portion of it for your business, then -- assuming you have adequate records of your use -- you could obtain reimbursement from your business for the use of your car and deduct that portion as a business expense, such as the business miles you put on your car.

Ultimately, many of these issues may be better resolved by an accountant than an attorney. You may want to retain a good accountant in any event, who may be able to offer you advice on the tax consequences of the various issues you raise.

Depending upon where you are located, I would be happy to provide to you the name of my business accountant.

-- Kenneth J. Ashman; [email protected]; www.lawyers.com/alo

Read more
Answered on 4/19/02, 4:00 pm


Related Questions & Answers

More Business Law questions and answers in Illinois