Tax Benefits to Larger Vehicles
Most passenger vehicles and small trucks used for business are subject to special reduced depreciation deductions. This deduction is further reduced by any personal use. But, if you buy a "heavy" sport utility vehicle (SUV), pickup or van, a much better set of rules apply. According to IRS regulations, a passenger vehicle is considered a "truck" for tax purposes when it has a gross loaded vehicle weight rating (the manufacturer's maximum weight rating when loaded) of over 6,000 pounds. Truck status means very favorable depreciation rules when the vehicle is used over 50% for business, including up to $25,000 of Section 179 expense. Contact us for a computation of the tax benefit. Although this may result in lower taxes currently, you should keep in mind the additional operating costs such as higher insurance, poorer gas mileage, more expensive vehicle, etc.