Passenger automobiles are 4-wheeled vehicles manufactured primarily for use on public roads that are rated at 6,000 pounds unloaded gross vehicle weight or less
The Tax Cuts and Jobs Act changed depreciation limits for passenger vehicles placed in service after December 31, 2017.
If the taxpayer doesn’t claim bonus depreciation, the greatest allowable depreciation deduction is:
- $12,200 for the first year
- $19,500 for the second year
- $11,700 for the third year
- $6,960 for each later taxable year in the recovery period
For 2023, businesses can write off 80% of most qualifying assets using bonus depreciation. In 2024, that percentage will drop to 60%. Unless the law changes, the bonus depreciation percentage will decrease by 20 points each year until it eventually phases out completely in 2027. If a taxpayer claims 100 percent bonus depreciation, the greatest allowable depreciation deduction limit is:
- $20,200 for the first year
- $19,500 for the second year
- 11,700 for the third year
- $6,960 for each later taxable year in the recovery period
You can claim the section 179 deduction and a special depreciation allowance for listed property such as automobiles if:
- predominantly used for qualified business (more than 50% of its total use)
- Gross Vehicle Weight (GVW) is more that 6,000 pounds unloaded