This is a true story. To make it more interesting, we’re going to insert you into it.

In 2022, you spent $130,435 for a Tesla Model X. You drove it 92 percent for business and deducted $120,000 as a business expense using 100 percent bonus depreciation.

This year, 2025, the IRS audits your return and says your Tesla is a car and does not qualify for the $120,000 write-off. Cars don’t qualify for big first-year deductions because they suffer the passenger auto luxury limits.

If the Tesla is a car, your first year write-off is $19,200.1 You will owe taxes and interest on the other $100,800, and you may also need to pay penalties.

What the IRS Said

After your face-to-face audit, the IRS sent ... Log in to view full article.