Business Deductions

Quick Links

Hot Topics

Paychex Payroll Services: Sign up Today!

Need Some Deductions for 2011?

Don't overlook these!

10 Oddball Tax Deductions

11 Most Overlooked Tax Deductions

Updated for 2011

Car and Truck Depreciation

<< Previous

Depreciating Heavy Trucks, Vans, and SUVs (weight-rated over 6,000 pounds)

Heavy trucks, vans, and SUVs built on a truck chassis, weight-rated over 6,000 pounds gross vehicle weight (fully loaded) are not subject to annual depreciation ceilings. However, the first-year expensing deduction is limited.

Update for 2011:

Section 179 may be avoided because of 100% bonus depreciation.

New for 2011 is the 100 bonus depreciation deduction. It applies to new depreciable business property purchased in 2011 and placed in service during 2011.

If you purchased a new SUV or truck, weight-rated more than 6,000 pounds, placed it in service in 2011 and used it 100% for business purposes, you may avoid the $25,000 deduction limitation under Section 179 and instead, simply claim 100% of the cost of the vehicle as bonus depreciation!

Section 179 Limitation for SUVs Tax Year 2011

For tax year 2011, the first-year expensing limit for SUVs weight-rated at over 6,000 pounds but not more than 14,000 pounds gross vehicle weight is $25,000. (See the update in the box above on how to avoid the $25,000 limitation.)

Passenger Cars, Trucks, and SUVs Weight-Rated 6,000 Pounds or Less:

Although the general first-year expensing limit for business equipment placed in service in 2011 is $500,000, this limit does not apply to certain vehicles.

Passenger cars, light trucks, and SUVs weight-rated 6,000 pounds or less have annual depreciation ceilings of $3,060 for passenger cars and $3,260 for light trucks and SUVs.

Bonus Depreciation for Passenger Cars, Light Trucks, and Vans 6,000 Pounds or Less:

For 2011, you may add $8,000 of bonus depreciation to the ceilings for passenger cars, light trucks, and SUVs weight-rated 6,000 pound or less. This increases the annual ceiling to: $11,060 for passenger cars and $11,260 for light trucks and SUVs.

Keep in mind, the annual ceilings in the tables shown in Form 4562 instructions, page 16 assume 100% business use. Therefore, if you use your vehicle less than 100% for business, you must reduce your total deduction for personal use.

For the purpose of the Section 179 $25,000 limit, an SUV is defined as:

Note that this definition covers heavy trucks, vans, and SUVs. You must use the vehicle over 50% for business to qualify for first-year expensing.

Exceptions to the above definition:

There are exceptions to the above definition for the following vehicles.

The $25,000 first-year expensing limit does not apply to the following vehicles:

If you purchased a new SUV or truck weighing over 6,000 pounds during 2011 and placed it in service in 2011 and used it 100% for business, see the "Update for 2011" at the top of the page for how to avoid the $25,000 Section 179 deduction for 2011.

Next:

Car Expenses-Depreciation: Depreciating Passenger Cars (weight-rated at 6,000 pounds or less unloaded)

Next >>