I am a resident who has started moonlighting. I want to purchase a new SUV this up coming year (2004) and want to know if I have to incorporate myself (make my own moonlighting company) in order to take advantage of the new "hummer deduction" for the new SUV I want to purchase. I drive extensively to my moonlighting jobs and thus at least 60% of my vehicle use is for business. If I do not have to incorporate myself, then do I list the deduction in the same way as those for my computer, journal subscriptions, etc. Thank you for your help!

Zip Code: jsuliburk@yahoo.com

As a general rule, anything that's deductible to a corporation is deductible to a sole proprietor as well. For that reason, as long as more than 50% of the miles driven are allowable business miles, then you can write off that percentage of the cost of an SUV with a gross loaded weight in excess of 6,000 pounds.

Keep in mind that commuting from your home to a regular place of business is not allowable mileage. Only driving between job sites and driving to temporary job sites counts.

Plus, you need to make sure that you drive the SUV more than 50% for business during each of the next five years. Otherwise, you'll need to "recapture" some of the depreciation you claimed, and pay taxes on the difference between the deduction you claimed this year, and what you would have been allowed to claim if you depreciated the vehicle ratably over five years.

Zip Code: cpa@mdtaxes.com