A magnetic car sign does not make your car a business tax deduction. The IRS is very clear about this (disclaimer: this is not to be construed as tax advice please seek professional help from an appropriate attorney or accountant). My understanding of this deduction is the vehicle has to be permanently altered to be used in your business to qualify for a 100% business deduction - and the examples they use is a delivery van with shelfs added and vehicles with "painted on signs." And in the past they have singled out the magnetic sign purposely as not a qualifying example.
It is easy to track the mileage you use for your business for pick ups or deliveries and that mileage is totally deductible (something like $0.45 or $0.55 / mile). Or you can keep track of all your vehicle expenses like insurance, loan payments, plates, gas, maintenance, etc. and deduct the mileage percentage you used of that vehicle for business (an example would be if you used your vehicle for 10% business - then 10% of all the expenses are deductible) - or you can take the mileage deductions (which for us has always been higher).
The cost of the sign is deductible and as far as advertising goes - you do have a captive audience at traffic lights. One last thing to check on - make sure your auto-insurance company knows you use your vehicle for your business. This can void your policy if for instance your vehicle was damaged while using for your business.
I hope this helps, God Bless, Ed R.
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