Part 5/11:
The recent Section 179 allowance permits writing off up to 100% of the cost of heavy vehicles (over 6,000 lbs), like large SUVs or trucks. While attractive, claiming 100% business use for such vehicles requires clear justification.
Red flag: Using the vehicle for personal errands or family trips while claiming full deduction.
How to defend: Maintain a driving log that records each trip’s business purpose and usage percentage.
3. Cash-Based Businesses
Cash businesses such as salons, nail shops, or freelance services often face suspicion if their reported revenue doesn’t match local industry norms.
- Red flag: Significant discrepancy between your reported income and typical earnings in your area.