Worth spending just to get tax deduction? (small business, pay, write off)

[NSHL10]

Question for all. I'm a sole proprietor in home care. I have always gotten 4 to 8 year old cars and written off the mileage and was satisifed with the cost of the vehicle compared to the write off obtained (12 K miles per year). Now my mileage will probably decrease to 8K and with the new Small Business law allowing bonus depreciation for equipment, I curious if buying new now will be an improvement to what I've always done. ( I imagine you are allowed to use standard mileage deduction on 1 car and use actual expenses on another during the same tax year)

I don't NEED a new car, so am I being foolish considering purchasing new to get the tax break. Things have thankfully been very good this year and now I'm looking at trying to increase tax deductions, but I don't want to be penny wise and pound foolish. I'm in the 28% tax bracket.

[maschuette]

I wouldnt spend money to get the tax wright off if you dont need what you are buying. A new car depreciates fast, and yes, you get to wright it off. That means if the car drops $10,000 you can save $2800. That doesnt sound smart to me. Instead it sounds like you wasted $7200. Tax write offs are great when it is something you need though. If there is a way for you to expand your business and increase revenue and write it off then i would say jump on it...IMHO.

[sunsprit]

There's only one person who can make an accurate assessment of what the value of the tax break will be in your situation ... the person who does your taxes. If you don't have an accountant now, you should at least consult with one to get all the information you need to make a good decision.

For the most part, in small businesses ... buying something to take advantage of a tax break came down to a "want", not an economically justified decision. You've done well by purchasing the remaining service life of pre-owned vehicles, but I think you'll find that the depreciation loss on a new vehicle must still be paid for out of your cash flow. That can be a very large chunk of your earnings; the way you'd justify this is to plan on keeping the vehicle for the type of mileage that you put on to your current vehicles before retiring them. At only 8,000 miles per year, you're looking at keeping this car on the road for at least 12-15 years, if not many more ... before it even becomes an "old car". Do you really want to pay top dollar for a car you must keep that many years to justify from an economic standpoint?