HOW TO PURCHASE A CAR IN YOUR BUSINESS NAME

let's let's let's get into this business so we um the first thing i want to talk to you about a few different things as far as tax plan is concerned but the first thing that we did um well not the first thing that we did but the thing that i want to talk about first is um the cars because you know it's one of these things that gets people's attention and everybody has an opinion on it and it's like but you know like i said everything that we do we do responsibly and everything that we do we share with the with the public so you know when we when we was purchasing our cars and shout out to you because you were the first person that really because i had never put a car in a business name before i always used to just you know buy my car at least my cars and put it on my own personal name and um i never had the opportunity can i say well i could say what kind of car you got you got the g g63 that's what your bench say i mean if your cpa ain't rolling like that if the cpa ain't rolling like that man you might need to find a new one g63 that's what you need that's a fact man spicy so um when i was talking to her and she gave me some games she like yeah you know i put it under my business account and she kind of like gave me the the knowledge on it so i'm like all right well i'm gonna get a car so i might as well do the same thing and it was a lot easier than i thought it was gonna be like it literally took me five minutes um and the dope part for me is that um my base my bank that i'm getting the financing through is chase and i bank with chase so on the app it has like my car payment thing right there and it's like all i gotta do is just open my chase app and it's just automatic for the car payment straight from the straight from the bay from the business account so um let's talk about it let's talk about it so there's two ways that you can um that you can accomplish this right well first let's talk about the six thousand pound rule because a lot of people was asking about the six thousand pound rule they thought that that's what it was because if you're not familiar well i'll let you i i don't they say i talk too much you explain it you explain to six thousand so smart rashad that's because you're so smart you can't help it you can't help it all right so let's talk about vehicles right so you have um you have your standard vehicles right most vehicles like um even range rovers g-wagons they fall a little under 6 000 pounds but for the most part all vehicles fall under about 6 000 pounds and if you do i mean we'll talk and i also want to talk about the different ways you can go about purchasing your vehicle right um so you have your financing then you have your leasing or you can pick the mileage method right most people are very familiar with the mileage method um however when you finance your car um it when you could pretty much purchase your vehicle um it sits as an asset in your business right so when it sits as an asset in your business anytime you have any type of assets um you get to depreciate them so when you are depreciating um your vehicles there's certain time frames um in terms of years that you get to depreciate it over so for anyone that isn't familiar when you depreciate any sort of asset what you're doing is you are you're pretty much um allocating the cost of whatever asset you've acquired and you are writing it off over time right so with the vehicle typically um standard depreciation years for a vehicle is seven years however um there's this thing called bonus depreciation that trump put um that trump pretty much wrote into his tax code where for vehicles that are less than six thousand pounds you the first year you get to deduct eighteen thousand dollars right the second year you get to depreciate sixteen thousand and then the year after that you get to deduct ninety hundred right in year three then every year after that you get to the 5 760 for each year until the value of your asset has been pretty um pretty much uh fully depreciated right meaning that you've captured the full cost of your vehicle now if your vehicle is more than 6 000 pounds you get to deduct 100 of the vehicle right and why that is so important is because sometimes people need those deductions right um you may say listen i purchased this vehicle it's over six thousand pounds i need those write-offs right so instead of writing it off over years you get to write it off 100 in that year the good thing about bonus depreciation you can choose to take it you can choose not to so let's just say hypothetically if you were saying you know what my vehicle um i want to um you know i don't want to take advantage of bonus depreciation right you will just uh write it off over years um over let's say those seven years and why that's important is because in like tax planning sessions we get to make those decisions right so rashad talks about tax planning um where i sit down with my clients and i kind of find out everything that's going on and then we get to make the decision on saying okay if you finance okay should we take advantage of bonus depreciation is your vehicle over six thousand pounds is it not and how we can treat it right um another option is leasing your vehicle so when you lease your vehicle you get to write 100 of the lease payment off right it's like any other expense that you are incurring on a vehicle um keep in mind on the fine if you're financing as well as leasing you are also able to take deductions such as gas um insurance payments registration um any sort of car washes um tires right you get to write those things off and i wanted to mention those things because um then you have the mileage method that people are very familiar with so with the mileage method you pretty much um it's kind of like a quick calculation for um i'm sorry i keep seeing people ask about pounds so i can't necessarily tell you how many pounds your vehicles are um but i'm sure if you google it you will find out how much your vehicle uh weighs um so now in regards to the mileage method that's pretty much the irs quick way of saying you know what if you don't want to keep track and you don't want to write off your payments or even if you drive a lot and it may be to your best interest instead of writing off the lease payments or um depreciating your vehicle we'll just do the mileage method so what that means is you just track your mouse from um from all of your business activities throughout the year and then you will multiply however many miles that is for 2019 was 58 cents um per mile now the thing um that people always make the mistake of when it comes to the mileage method is that they feel they can take the mileage method and then also deduct gas and insurance and all of those things on top of it but you can't the idea behind the mileage method it's kind of like a quick calculation for you to say you know what i'm just going to write off my vehicle this way um something to note is that you have to either take advantage of the mileage method or the actual method right so the actual method is writing off your actual expenses such as you know like your lease your insurance your gas all of those things or you use the mileage method right which is the quick calculation um so i don't think i have any more to really see no real real quick because as as i'm listening to you say and from a cpa standpoint is it best that like if i have a credit card i allocate that credit card specifically to all those things right so that makes it easier to to make for bookkeeping would that be a good idea no because when we doing your bookkeeping we'll we'll be able to allocate that um what you guys should have and um and i don't know i'm gonna put this out i don't know if you guys have it but everyone who has a business and you guys have business credit everyone should have a gas card right um so if you guys don't have gas cards you should get gas cards uh a gas a gasol a car a card for gasoline yes but it's strictly under your business name so they go they base it um off of your business credit and that's how you qualify for the the um the gas card so like i have bp um shell has gas cards there's a few different um there's a few different gas companies that issue um gas cards but that is a really good way because you know that that card is specifically for gas um there's usually like you'll get a um like reduced rates um and then it's a really good way to just kind of keep track of it and build your business credit at the same time so that is that's really good i i didn't even know about the gas card i learned something i just learned something just now gotta call my cpa tomorrow on friday you learn something every day you learn something every day so so you shouldn't be getting gas because like right now i'm getting gasses on my regular credit card i shouldn't be doing that everything should be under your business name and that's something very important so when you say under your under your credit card is it your personal credit card or a business credit card the gas is my personal credit card personal so yeah you need a business credit card so it should either be under your business gas card or your business credit card and i'm glad that you said that because that is the number one struggle that i have with business owners is that we co-mingle our funds right we take our personal funds our personal credit and we pay for things on the business side and we have to start looking and treating our businesses like separate people right like you would never come and pay my bills i would never come and pay your bills right and you just have to kind of look at your entity like that as well right like your entity has their own um has its own legal name it has its own ein number that acts as a social security number right so you definitely should not be paying for your gas now that you have the car under your business you should not be paying for your gas under your personal car okay so i'm happy that you said that noted noted i appreciate that so i should be paying for it for either a business credit card or a business debit card yes what about any other expenses that might come with the car everything should be paid everything should be under your business that card now belongs to your business so look at it as though like my car right like if i needed tires you wouldn't come and be like you know what i'm going to pay for that that's kind of like what you're doing i mean unless you just want to give me like be nice and generous but but you know ideally that's how i like to explain it to people you know you just have to separate everything out that that car is not your car that car is the business car so you want to take care of all of the expenses underneath the business maintenance um you know car registration um inspection everything related to the car should be under under the business name got it got it got it um and yeah so the six thousand rule the range rovers range from forty four thousand nine hundred pounds to five thousand seven hundred and forty five pounds so the range rover is just underneath six thousand pounds so that's why we did the um what are we we're doing this we're doing standard or actual you're doing actual right you guys are gonna do actual and you're gonna write off your payments right so that's why we did actual but what we what we are using the six thousand pound rule for is our truck big truck the big truck not the not the range not that truck the real truck the trucking 18 wheeler so yeah you want to talk about that yes so um that is definitely a really good perk um for my people that get into trucking where you are able to write off 100 of the vehicle costs um so again you may need starting up that business you may need to write that you know write that vehicle off 100 in that year but again let's say if we sat down and we were like you know what if we kind of take the entire cost of the vehicle that may put us in a negative depending on what you're trying to do you may try to qualify for a home you may be trying to go for a loan right you may not want your um even though when they do loans they add back depreciation but you may not want to exhaust all of that um all of that expense into for 2020. you may want to kind of keep it on the book so that you can exhaust it over time right and that is what's extremely important and that's why it's important to have these conversations right so there's a couple things that i pointed out so far that you need to have the conversation you need to understand if you're going to do the actual method or the mileage method you also need to understand if you're going to take advantage of bonus of depreciation or you're not right and so those conversations have to be had and they have to be had ideally before the year is over right i have so many clients um that i engage in they're like yeah only time i talk to my accountant is january through april but now that you guys have businesses you have trucking companies you real estate whatever it is you can't wait until the end of i mean the next year to talk about taxes uh it's a fact it's extremely important and um i feel like there's so much stuff that people don't know like you know what i'm saying it's like even i didn't know about that um the gas the gas card and i'm a financial advisor so there's so much information out there and it's like if you're not properly educated you can make mistakes and like i said this it's it's a lot easier than i thought it was going to be all you need is the ein number you need a business name so when you when you when you get the car you get them you give them that information i think you need the the articles of operation the articles of operation your address that you incorporate the business with and then if the business is like under 10 years i don't think you could get it just solely on your business so you have to um like be a personal um guarantor guarantee whatever but even that is is good to know so like it's good to know that to have good credit too right because if your credit's not great then you can't be the person oh yeah for your own car yeah so so they run like your personal credit but it's under your business name right so the business the businesses the car is under the business names but they run your personal credit exactly um and it's survived like just knowing that that car like knowing that my car belongs to my business it just i don't know it feels better but just to kind of piggyback for what you guys were saying um it's really important one yes your credit needs to be um in shape right you have to have your credit together um but to just kind of go through the ways that you can qualify for a car loan one is completely outright purchasing it through your business name however you're not going to be able to outright purchase it under your business name if one you don't have established credit or you've never had any big loans right so for me that was the scenario where i had some business credit i had the taxes right so they should be asking for taxes they asked for your bank statement right because ideally just how you need to qualify for the loan they want to see what's going on on your business and so you have to show them bank statements you have to show them tax returns um but that may not be enough even if you have the income side because what they may want to say is okay we can't really trust you to give you this big loan because you've never had a loan um exclusively in your business name so that's when you as the individual have to come in and back the business right and that can be done in two ways you can either come in as a co-signer which you guys were just talking about or co-applicant right and so those are two different things like i have to i went in as a co-applicant i'm not sure if you guys went in as co-signers or co-applicants because it's kind of like the difference is that a co-signer like it wouldn't it doesn't show up on your personal um credit right but the co-applicant it does show up right it shows up on my personal credit because it's almost like we went me and my business we went into the loan together so that's why it's showing up on my business side as well as my personal side um so i just wanted to point that out that there are um you know that's also another way as well that um you know you will qualify but again that's kind of more of a lending thing from an accounting side you definitely got to make sure that you know your taxes are completed you have to make sure that it is a situation where um you know they some lenders may request a profit and loss statement i.e you'll need to make sure that your bookkeeping is in place which a lot of business owners that's like the first thing that they neglect is their um is their bookkeeping so just being financially set so that you can position yourself to not only save on taxes but like really build your business credit all right we got we got a few questions for you ms business but before we go to the questions um everybody on youtube if you could be so kind to like hit the like button greatly appreciate it and um for people that might just be tuning in to youtube that might not know what's going on here so as i said um eyl university is our educational platform so we have 70 archived classes and then we have weekly classes every single week on different topics from different presenters everything from how to start a marijuana business to car insurance to real estate to taxes to taxes everything and then we have monthly financial planning calls with me we have bi-weekly real estate calls with mg the mortgage guy we have book club ran by you movie club ran by you yup yup um private facebook group so it's a whole community it's not an investment um club it's not an investment tips it's an actual university where you learn and we're gonna actually open our trade department um called willing in 2021 with the hvac and like plumbing and stuff like that to try to teach people that skills man skills skills very important skills is very important so at once a month we do what we call open enrollment to just like open it up to the public and then just you know show it and you can you know see for yourself so right now for black friday to the end of black friday we're running a 50 off sale on uh my annual membership uh which is 333. i'm like that yeah for the year 332 for a year it's like i know there's a bunch of people that's like waiting for nine o'clock yeah it's closer this is less than that so i'm gonna put the link in here the link is also in the description um so if you wanna if you wanna do it the code the code is eyl 50 and you go to eyluniversity.com and you get 50 off a couple hundred dollars less less than a night out in uh atlanta that's the only thing atlanta's the only place that's open so that's the only thing i can really say that's a big ain't no other place open but uh yeah part of ewy university is that we get question and answers so yeah market mondays is kind of like a case study in that you get to but this is what we do every single week where we bring an expert in the field and then people get to ask them questions my graduates from my school being forbes backdrop backdrop backdrop you

Channel: Earn Your Leisure

Views: 662,753

Rating: 4.9667382 out of 5

Keywords: earn your leisure, business, finance, entertainment, How To, Purchase A Car, Your Business, Taxes

Id: OUkkRR7CAcs

Length: 20min 7sec (1207 seconds)

Published: Fri Nov 27 2020