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It seems like everyone talks about buying a G-Wagon under their business name and deducting it on their tax return at 100%. Yes its true and possible under IRS Section 179 and Section 168 - Bonus Depreciation, all detailed in IRS Publication 946.The IRS provides very specific guidelines on the type of car that a business owner is able to purchase and deduct on their tax return. Some of the details include:
- Vehicles up-to 14,000lbs
- Must be placed in service in year 1 (for bonus depreciation)
Companies can take both Section 179 and Bonus Depreciation allowances, but Section 179 must be taken first and the company must be profitable to take the Section 179 deduction. With bonus depreciation, there is no business income limitation and could create an allowable loss for the tax year.
Provisions for the deductions are:
Vehicles under 6,000lbs are allowed a Section 179 deduction of $10,200 and vehicles between 6,000 and 14,000 are allowed a deduction of $25,000. The remaining balance can be deducted under bonus depreciation.
The last year of being able to take bonus depreciation at 100% is 2022. Bonus depreciation starts to phase out over a 4 year period starting in 2023 at the following percentages unless the law is extended.
2023 - 80%
2024 - 60%
2025 - 40%
2026 - 20%
List of cars eligible for Section 179 and Bonus Depreciation
2021-2022 Audi Q7 & SQ7 6,393 to 6,581 lbs
Q8 & SQ8 6,471 lbs
2021-2022 BMW X5 M 6,162 to 6,559 lbs
X5 XDRIVE 35I6,063 lbs
X6M 6,614 lbs
X6 XDRIVE35I 6,030 lbs
X7 (all models)6,989 to 7,319 lbs
2021-2022 Bentley BENTAYGA 7,165 lbs
2021-2022 Buick ENCLAVE 2WD/4WD 6,160 lbs
2021-2022 Cadillac ESCALADE 2WD 7,400 to 7,600 lbs
XT5 6,001 lbs
XT6 6,001 lbs
2021-2022 Chevrolet COLORADO 2.8L AWD 6,001 lbs
SILVERADO C1500 6,800 to 7,100 lbs
SILVERADO C2500 8,600 lbs
SILVERADO C3500 8,100 lbs
SILVERADO K1500 6,800 lbs
SILVERADO K25002 4,000 lbs
SUBURBAN C1500 7,500 lbs
SUBURBAN K1500 7,200 to 7400 lbs
BLAZER 6,001 lbs
TAHOE 2WD LS 7,100 lbs
TAHOE 4WD LS 7,500 lbs
TAHOE HYBRID 7,100 to 7,300 lbs
TRAVERSE 2WD 6,160 lbs
TRAVERSE 4WD 6,160 lbs
2021-2022 Chrysler PACIFICA 6,055-6,300 lbs
PACIFICA HYBRID 6,300 lbs
2021-2022 Dodge DURANGO 2WD/4WD6,500 lbs
GRAND CARAVAN 6,050 lbs
2021-2022 Ford EXPEDITION 2WD/4WD 7,200-7,450 lbs
EXPLORER 2WD/4WD 6,160 lbs
FORD F-150 and larger 2WD/4WD 6,010-7,150 lbs
FLEX AWD 6,150 lbs
2021-2022 GMC ACADIA 2WD/4WD 6,001 lbs
SIERRA C1500 7,200 lbs
SIERRA C2500 HD 9,900 to 10,850 lbs
SIERRA C3500 HD10,750 to 11,500 lbs
SIERRA K1500 6,800-7,100 lbs
SIERRA K2500 HD 9,900-10,850 lbs
SIERRA K3500 HD10,750 to 11,500 lbs
YUKON 2WD/4WD 7,300 lbs
YUKON HYBRID 7,100 to 7,500 lbs
YUKON XL C1500 7,300 lbs
YUKON XL K1500 7,500 lbs
2021-2022 Honda PILOT 4WD 6,096 lbs
ODYSSEY 6,019 lbs
RIDGELINE AWD 6,019 lbs
2021-2022 Infiniti QX80 7,300 lbs
QX60 6,063 lbs
2021-2022 Jeep GRAND CHEROKEE 6,050 lbs
GLADIATOR RUBICON 6,250 lbs
2021-2022 Land Rover ROVER 4WD 6,875-7,075 lbs
ROVER SPT 6,614 to 7,055 lbs
DISCOVERY 6,875-7,075 lbs
DEFENDER 6,415 to 7,120 lbs
2021-2022 Lexus GX460 6,600 lbs
LX570 7,385 lbs
2021-2022 Lincoln MKT AWD 6,219 lbs
NAVIGATOR 7,350-7,625 lbs
AVIATOR 6,360-7,150 lbs
2021-2022 Mercedes Benz G550 6,945 lbs
GLS 7,275 lbs
GLE 6,273-6,823 lbs
Metris 6,393 lbs
Sprinter 8,550-12,120 lbs
2021-2022 Nissan ARMADA 2WD/4WD 7,300 to 7,500 lbs
NV 1500 S V6 8,550 lbs
NVP 3500 S V6 9,520 lbs
TITAN 2WD S 7,300 lbs
2021-2022 Porsche CAYENNE 6,239 to 6,471 lbs
2021-2022 RAM Promaster 1500-3500 8,550 lbs
RAM 1500 and up 6,010 to 7,800 lbs
2021-2022 Subaru ASCENT 6,000 to 6,001 lbs
2021-2022 Tesla Model X 6,250 lbs
2021-2022 Toyota 4RUNNER 2WD/4WD LTD 6,100 to 6,300 lbs
LANDCRUISER 7,385 lbs
SEQUOIA 2WD/4WD LTD 7,100 to 7,300 lbs
TUNDRA 2WD/4WD 7,210 to 7,780 lbs
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