Just picked up my 35d

[bigx5er]

Originally Posted by ABMW

My income is substantially higher than $45k. That is the confusion you all are confusing, I believe. Magnify it by many magnitudes. I also file jointly with my wife.

Thus, a $65 to $70k deduction at my tax rate of 56% helps me a great deal.

33% federal Tax Rate + 15% self - Employment Tax Rate + 9% CA Tax.

My total income is in the mid 6-figures when combined with my wife's. The $65 to $70k deduction doesn't really toss us into a lower tax bracket, but it helps with not having to pay taxes on that amount of income at my tax rate.

In other words, as a hypothetical example: Imagine I made $100k. I purchased a vehicle for $70k for business that allowed me to deduct the full 100% (or depreciate the full 100% the first year-2009). My effective income then drops to $30k. My tax rate on 30k, due to my wife's income is still 50%.

The math works well. I'm displaying the above as a hypothetical example to assist others, as I know there are many in the same boat as am I.

If it's complicated, that's the point. IRS code is not fun, but it helps to be married to one who's a smart gal with a certain advanced degree that everyone loves to hate. You all can figure out what degree that is, I'm sure. But, for the record, she hates it to, so don't let your kids ever take the LSAT and as a final note, the figures are 100% correct for MY situation.

If you're coming up with differing figures, your math or interpretation is incorrect, but I can refer you to a very good individual who can assist.

Really, I'd like to help, so don't hesitate to PM me on this matter. If you use your X5 for business, and you bought it new this year, I strongly encourage you to at least investigate the option of accelerated bonus depreciation that's available to you.

Best

So you have an effective rate of 56%. That part makes sense to me. You still can't get to a 45K deduction, no matter what math you use. Even at 100% of a 62K SUV, you still land at 34K (and you can't do it at 100%)

You would have maxed out on social security already, that is 12.4% on your self-employment tax. So no savings there. Medicare at 2.9% is not impacted by deductions, it's straight off the income line. So that lowers your effective rate to 42%.

Once you maxout on the brackets, your income doesn't matter. I'll guess most people in this forum make some decent money if they are buying X5s.

[ABMW]

Originally Posted by bigx5er

So you have an effective rate of 56%. That part makes sense to me. You still can't get to a 45K deduction, no matter what math you use. Even at 100% of a 62K SUV, you still land at 34K (and you can't do it at 100%)

You would have maxed out on social security already, that is 12.4% on your self-employment tax. So no savings there. Medicare at 2.9% is not impacted by deductions, it's straight off the income line. So that lowers your effective rate to 42%.

Once you maxout on the brackets, your income doesn't matter. I'll guess most people in this forum make some decent money if they are buying X5s.

It's probably unwise to give financial advice here, as I'm not an accountant. But, in short, if you want to know how it's derived you can always PM me.

I don't agree with you assessment that most X5 owners make decent money. I can't tell you how many dozens and dozens of credit reports I've looked over this year alone, that show insane incomes of $45 to $50k, with zero savings, and $1,500 per month car payments.

In 2009, the largest savings I saw for any individual under the age of 30, was around $20k. That person drove a high-end german automobile and earned about $70k.

Yes, people on this board probably make more than those on Jeep boards, but I think you'd be surprised to see what most people actually take home.

In my professional experience there is little correlation with the car one drives and the income one earns.

Just what I've seen....

But, everyone has their own opinions, naturally.

Cheers.

[Armand]

Originally Posted by ABMW

It's probably unwise to give financial advice here, as I'm not an accountant. But, in short, if you want to know how it's derived you can always PM me.

I don't agree with you assessment that most X5 owners make decent money. I can't tell you how many dozens and dozens of credit reports I've looked over this year alone, that show insane incomes of $45 to $50k, with zero savings, and $1,500 per month car payments.

In 2009, the largest savings I saw for any individual under the age of 30, was around $20k. That person drove a high-end german automobile and earned about $70k.

Yes, people on this board probably make more than those on Jeep boards, but I think you'd be surprised to see what most people actually take home.

In my professional experience there is little correlation with the car one drives and the income one earns.

Just what I've seen....

But, everyone has their own opinions, naturally.

Cheers.

Incomes aside, ABMW did a very clever thing. The law allows him to deduct the entire cost of his vehicle over a few years. You could not do it if the special depreciation did not exist for 2009. Frankly, I am surprised he was complaining about paying MSRP. He will save much much more in business tax deduction. The law expires on 12/31 unless of course it is extended...

[ABMW]

Originally Posted by Armand

Incomes aside, ABMW did a very clever thing. The law allows him to deduct the entire cost of his vehicle over a few years. You could not do it if the special depreciation did not exist for 2009. Frankly, I am surprised he was complaining about paying MSRP. He will save much much more in business tax deduction. The law expires on 12/31 unless of course it is extended...

I should edit my post. I'm not complaining so much about the MSRP, as I am about the ethics of the dealer. Your right the $2k, I could have gotten off of MSRP is no big deal.

What was sad to see was the behavior of the sales manager, in the face of printed, and published materials straight from BMW. I could have walked, but 99.9% of you who say you would have walked, would have done no such thing. Of course I have an ego, but my ego is not going to let me throw money down the drain to the IRS, when I needed a new car anyway.

Complaining about the behavior of the sales manager, not to mention, what took place today with my X5 when it stalled in the middle of an intersection with an "engine malfunction warning display" is the reason I'm complaining.
(the above I posted in an ongoing thread) It took 3-hrs. of talking on the phone between SOS and Concord BMW, before SOS finally let them have it. It was almost to the point of a reality TV show, save for the fact that I was stuck in the middle of a 60 mph. intersection for 10 mins. and then the side of the road on and then on the phone for 3 hrs. trying to resolve who was responsible for repairing my 4 day old X5 35d!

Avoid Concord at all costs.