This Week’s Money Map:

• 🚙 Tax tip: Small businesses (and side hustles) can fully depreciate a Range Rover

• 💳 Credit card points strategy (part II): Max out everyday spending

• 💸 Maximize tax deductions and credits before year end

• 🚗 Secret tip to getting cheaper car insurance (part I)

• 🚙 Where should you sell your car? My take on Carvana, CarMax and the dealership

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🚙 Tax tip: Small businesses (and side hustles) can fully depreciate a Range Rover

Did you know your small business or side hustle can potentially fully depreciate a Range Rover and gain significant tax benefits? It’s true! 

Although we’re not recommending that you buy an expensive car, if you were planning on it and you have a small business or side hustle that requires a car, it’d be wise to take advantage of this lesser-known tax savings tip: 

By purchasing a heavy vehicle like a Range Rover, large truck or any vehicle over 6,000 pounds before year-end, you can leverage IRS tax codes to your advantage.

Leveraging Section 179 and Bonus Depreciation

• Section 179 Deduction — Allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. Land Rovers can be depreciated up to 60% in the first year and fully depreciated in six years.

• Which Vehicles Qualify — Vehicles with a Gross Vehicle Weight Rating (GVWR) over 6,000 pounds, like Range Rovers, are eligible. If used more than 50% for business, you can deduct a significant portion of the cost.

• Bonus Depreciation — Besides Section 179, bonus depreciation lets you deduct a percentage of the remaining cost basis after the Section 179 deduction. For 2024, the bonus depreciation is 60%.

How to Take Advantage

• Purchase Before Year-End: Buy and place the vehicle in service by December 31st.

• Use for Business: Ensure the vehicle is used over 50% for business purposes.

• Document Everything: Keep detailed records of purchases and usage.

• Consult a Tax Professional: Professional advice ensures compliance and maximizes benefits.

Important Considerations

• Business Use Percentage: Deductions are proportional to business use.

• Limits and Phase-Outs: Be aware of deduction limits and potential changes in tax laws.

Disclaimer: This is general information and should not be considered tax advice. Please consult a qualified tax professional to understand how these rules apply to your situation.

💳 Credit card points strategy (part II): Max out everyday spending

Not every purchase earns points equally. Many cards offer bonus points for specific spending categories like dining, travel, groceries or gas. Paying attention to these categories can help you earn more points without changing your spending habits. 

For example, if you eat at restaurants often, use a card that gives you 2X to 4X points on dining. A card with a grocery multiplier could be highly beneficial for routine grocery runs.

How to Choose the Right Card for Everyday Spending:

1. Identify Your Top Spending Categories: Review your monthly expenses to see where you spend most often — dining, groceries, travel, etc.  

2. Use Multipliers to Your Advantage: Cards like the Amex Gold offer 4X on dining and restaurants. Cards like the Capital One Venture offer 2X on all purchases. Travel credit cards offer up to 10X on travel! Build your card quiver to multiply points on all your spending.

3. Consider Points Flexibility: Cards that offer points transferable to multiple programs (like Chase, Amex or Citi) can maximize your redemption options.

With the right strategy, your everyday spending can work harder for you. Match your habits to cards that offer top rewards, and watch your points grow effortlessly. Check out MoneyGeek's guide on credit card points to dive deeper into how credit card points work.

💸 Maximize tax deductions and credits before year end

It’s almost year-end — time to snag every tax break possible! A few smart moves now could lead to a bigger refund or a lower bill come tax season. Ready to save more? Let’s go!

Boost Your Retirement Contributions
Contributing to your 401(k) or IRA lowers your taxable income while growing your future nest egg. In 2024, you can contribute up to $23,000 to a 401(k) if you’re under 50. If you're self-employed, explore options like a SEP IRA or solo 401(k). Check out MoneyGeek’s guide to retirement savings.

Use Up Your FSA Funds
Got a Flexible Spending Account (FSA)? Most funds don’t roll over, so spend them now on eligible expenses like eyeglasses, dental care or over-the-counter meds. Don’t let your hard-earned dollars go to waste.

Harvest Investment Losses
Did some of your investments flop? Sell those underperforming stocks to offset gains and reduce your tax bill. This strategy, called tax-loss harvesting, can be a lifesaver.

Charitable Giving
Donations can reduce your taxable income and make a positive impact. Consider gifting appreciated stocks for extra tax benefits. Don’t forget to keep your receipts for deductions — here’s a guide to charitable giving.

Plan Your Business Expenses
Own a business? Prepay expenses or invest in new equipment before year-end to lower your taxable income. 

Act Now to Save Big
The clock is ticking, but there’s still time to take charge of your tax strategy. Whether you're deciding between filing online or using an accountant, knowing the right tools and approaches can make a difference. For more actionable tips to boost your deductions and credits, explore MoneyGeek’s comprehensive tax planning resources. 

🚗 Secret tip to getting cheaper car insurance (part I)

Here’s a game-changing tip: Don’t wait until your current policy is about to expire to shop for new rates. Starting your search early can lead to noticeable savings. Here’s why:

Timing Influences Your Cost
When setting premiums, insurance companies consider the time between your quote request and policy start date. Requesting a quote two to four weeks early demonstrates responsibility and could lower your rates. Waiting until the last minute? That might signal higher risk, leading to pricier premiums.  

Advance Quote Discounts
Many insurers offer advance quote discounts for proactive shoppers. Planning can qualify you for these discounts, shaving noticeable dollars off your premium. Savings vary, but early shoppers often benefit most. 

Benefits of Shopping Early

• Time to Compare: Early shopping lets you gather quotes from multiple insurers to snag the best deal.

• Avoid Coverage Gaps: Continuous coverage helps you avoid rate hikes from lapses in insurance history.

• Informed Decisions: You can select the right coverage and add-ons with no rush.

Other Tips to Maximize Savings

1. Set a Reminder: Mark your calendar for 30 days before your policy renewal.

2. Compare Quotes: Shop around with at least three insurers.

3. Ask About Discounts: Specifically inquire about early shopper or advance quote discounts.

Shopping early isn’t just brilliant — it’s your ticket to lower premiums and better coverage options. Start comparing quotes now to snag discounts and avoid last-minute pressure. Need help choosing the right policy? Learn about full coverage options or explore liability-only insurance.

For more tips and tools to secure the perfect policy, dive into MoneyGeek’s ultimate car insurance guide. 

🚙 Where should you sell your car? My take on Carvana, CarMax and the dealership

Selling your car can feel like navigating a maze of offers, paperwork and negotiations. I’ve been through it all — Carvana, CarMax and the dealership — and here’s what I learned to help you get the best deal with the least hassle.

Carvana: Effortless and Surprisingly Generous
Carvana’s online process is seamless. Enter your car’s details, and you’ll get an instant quote. If you like the number, a Carvana rep will come to your driveway to pick up the car — no haggling, no stress. Its offer was higher than the dealer’s and even competitive with CarMax. Bonus? Carvana handles the paperwork, including title transfers.

CarMax: Fair Offers and Price Match Potential
CarMax provides in-person appraisals that take about 30 minutes. Its offer was slightly lower than Carvana’s but still solid. Plus, CarMax will buy your car outright, even if you’re not purchasing a new one. Pro tip: CarMax has a price-match policy, so bring any better offers to the table.

The Dealer: Higher or Lower Offers — Could Surprise You
If you’re selling your car to a dealer, they could offer you significantly more depending on their inventory and the desirability of the car. I actually got an offer from the dealer that was 20% higher because they wanted my car on the lot. 

Dealers have a reputation of lowballing trade-ins, hoping to wrap your old car’s value into your new car purchase. But if you’re buying a new vehicle, a lower sales price from the dealer can benefit you with a lower sales tax. I recommend getting an offer from your local dealer and comparing.

Bottom Line
Get multiple offers! It could mean thousands more in your pocket.

Smart Cents gives you actionable tips and mindset shifts to help you reach your financial happy place. Thanks for being a part of our community.

The MoneyGeek Team

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