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The business spends pretax dollars to pay the car payments instead of post tax W2 income or dividends/other cash disbursements that are taxed and then you can d
by quickthrowman 2y ago
The business spends pretax dollars to pay the car payments instead of post tax W2 income or dividends/other cash disbursements that are taxed and then you can depreciate the company car against future income.
- potato3732842 2y agoSo? Businesses spend pre-tax dollars on most things they buy. Most companies literally don't have the margins to be solvent if all their purchasing activity is subject to 20%+ tax.
- NewJazz 2y agoI think the implication is that the small business owners use this tax structure, but then use the car as a personal vehicle rather than a business vehicle.
- quickthrowman 2y agoThis thread is discussing how business owners use tax loopholes to buy personal vehicles as company assets to avoid paying with their personal post-tax money. It’s obvious that most businesses can’t survive if their revenue is hit with income tax before expenses are paid, that’s why revenue is not taxed as income.