Tax Reform Allows Bigger, Faster Business Car Deductions

If you bought a car in 2017 that cost over $15,800, Uncle Sam considered it to be a luxury car and put a lid on your depreciation.

For example, if you bought a $40,000 vehicle and drove it 100% for business, your maximum depreciation deductions for the first five years would total just $15,060.

And to fully depreciate the car would take nineteen years. Ridiculous!

Well, the new tax reform law fixed all that which is good news.

Want to get all the details? Before you head to your car dealership, read my new article titled Tax Tips: Tax Reform Allows Bigger, Faster Business Car Deductions.

Three ways our fact-filled article can help you:

1. We’ll tell you how the new law works. For starters, it sets the so-called luxury automobile limit at $50,000. That means any vehicle costing $50,000 or less isn’t penalized by the luxury vehicle limit when using the Modified Accelerated Cost Recovery System (MACRS). You’ll get the whole story when you read the full article.
2. We’ll explain what the new limits mean. Before the new law took effect, many business taxpayers were buying vehicles with gross-vehicle-weight-ratings (GVWRs) greater than 6,000 pounds. They did that to escape the roughly $15,000 draconian luxury limits. Now, thanks to tax reform, they don’t have to. You’ll get all the details when you read the full article.
3. You’ll learn about the enhanced bonus depreciation. More good news. Tax reform enhanced bonus depreciation, but limits the benefits to $8,000 on luxury cars. This is not a problem and you’ll still come out a winner as we’ll explain when you read the full article.