title>Tax Guru-Ker$tetter Letter Wizard Animation

                 

Tax Guru-Ker$tetter Letter
Sunday, October 24, 2004
 
SUV Deduction Limit Not As Low As Many Think
I was just reading the latest Federal Tax Bulletin from Kleinrock and their example of the new limited tax deductions for business SUVs illustrates that things aren't as bad as many have been worrying about.

The example in their newsletter is of a $70,000 SUV purchased new in 2005. On top of the $25,000 Section 179 deduction, the owner can also claim the 50% additional first-year depreciation of $22,500 based on the remaining $45,000 cost basis. With the normal $4,500 depreciation for a vehicle, the total cost of the SUV that can be deducted in that first year will be $52,000, with the remaining $18,000 deducted over the following four years.

The big differences to keep in mind are that the 50% additional first-year depreciation is only available for brand new business assets, while Section 179 can be claimed for anything that is new to the taxpayer, including items previously owned and used by someone else.

Labels:



Powered by Blogger