I started an LLC this year (freelance graphic design.) I have been using my own car for errands, meetings, deliveries, etc. I was wondering if I could write-off the monthly payments. Would it matter/help if I put stickers of my company logo on it?
Thank you.

No, you cannot write off the actual monthly payments as such but you can deduct greater of the mileage method or the actual expense method. Generally speaking it does not matter to the IRS whether or not you put stickers of your company logo in order to claim auto expenses related to your business use of your personal vehicle. But, it might help you with respect to your Marketing efforts!

The Mileage Method
Under this method, the taxpayer has the option of taking the total business mileage driven (in the applicable tax year) multiplied by the IRS mileage allowance for the given tax year. Thus, let us assume you have driven 10,000for the tax year 2009, you would be allowed to deduct 10,000 x 0.55c = $5,500.00.

The Actual Method
Under this method, the taxpayer has the option of deducting actual auto expenses related to the operation of your vehicle based on the % used for business. In addition, you may depreciate your vehicle over the 5 allowable years with certain annual depreciation limits x % of business used. Thus, for example you can expense the sum of following auto related expenses;

1. Auto Insurance x % business useage
2. Auto Gas/Oil x x % business useage
3. Auto Repair x % business useage
4. Depreciation of the Auto vehicle (subject to the annual limits x % business useage).

Depreciation limits on business vehicles.
Code Sec. 280F imposes dollar limitations, also referred to as "luxury auto limits," on the depreciation deduction for the year that a business vehicle is placed into service by the taxpayer and each succeeding year.

Passenger automobiles
The maximum depreciation limits for passenger automobiles fist placed in service during the 2009 calendar year are:

• $2,960 for the first year; ($10,960 for automobiles for which the special depreciation allowance applies)
• $4,800 for the second year;
• $2,850 for the third year; and
• $1,775 for each tax year thereafter.

Trucks and vans
The maximum depreciation limits for truck and vans first placed in service during the 2009 calendar year are:

• $3,060 for the first tax year, ($11,060 for trucks or vans for which the special depreciation allowance applies);
• $4,900 for the second tax year;
• $2,950 for the third tax year; and
• $1,775 for each tax year

Thus, the taxpayer would be advised to compute the expenses related to both of these methods and select the one that yields the greatest deduction.

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