In general, the sooner you benefit from your tax deductions, the better the outcome for your net worth. That’s one reason to know about the luxury vehicle depreciation limits.
Tax planning for vehicle purchases and sales can add to your net worth.
The luxury vehicle limit makes for interesting planning, thanks first of all to how tax law classifies vehicles. For example, say you buy a $40,000 vehicle and use it 100 percent for business. Did you know that your first-year maximum tax deduction, depending on type of vehicle, can range from $3,060 to $40,000? Which would you rather have?
If you were stuck with the $3,060, what magic and super-easy step must you take to realize the most benefit from this limitation?
In this article, we explain how to get the maximum benefits from your business vehicle deductions.
Overview of New 2010 Limits
The new 2010 limits are different for different vehicles. For example, your 2010 maximum depreciation limit on a $40,000 vehicle is
$3,060 on a car with a curb weight of 6,000 pounds or less;
$3,160 on a truck or van with a gross vehicle weight rating (GVWR) of 6,000 pounds or less (GVWR is explained below);
$28,000 on an SUV or a crossover vehicle that qualifies as a truck and has a GVWR of ... Log in to view full article.