Do you own a tax-law-defined luxury automobile, crossover vehicle, pickup truck, or sport utility vehicle?
If you do, this issue of the Tax Reduction Letter makes “must” reading.
Why? Because the Tax Cuts and Jobs Act lets you deduct 100-percent of the cost of qualifying assets. It makes one major exception.
I’m talking about the $8,000 bonus depreciation cap that applies to the vehicles listed above!
The bottom line? If you don’t handle things correctly, you could lose a lot of money. We’ll show you how to avoid making a very costly mistake when you read my new article titled Tax Tips: IRS Saves Many Vehicles from the TCJA Bonus Depreciation Debacle.
Three ways our fact-filled article can help you:
- We’ll show you how to take advantage of a valuable safe harbor rule. Here’s the good news: Uncle Sam has created a safe harbor provision that rescues you from a big tax bill. How does the safe harbor provision work? What calculations are involved? You’ll find out when you read the full article.
- You’ll learn if you should claim a Section 179 deduction on your vehicle (that’s subject to luxury limits). Our advice, in a word, is
… don’t! If you claim the Section 179 deduction, you won’t get an additional dollar of benefits greater than you’d get with straightforward depreciation. You’ll get the whole story when you read the full article. - We’ll explain why you should elect out of bonus depreciation. Seriously, it’s the smart way to go. You can elect out of bonus depreciation but you must do that on an asset-class basis. Vehicles are in the five-year class. To elect out on a vehicle, you have to elect out of bonus depreciation on all assets in the five-year classification. We’ll show you how to do it when you read the full article.