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Taxpayers that use cars, SUVs, pickups, and vans for business purposes can deduct vehicle-related costs using standard mileage rates. However, most are better off deducting their actual expenses. The actual expense method requires you to calculate depreciation deductions, which can be complicated. Here are the basics to help you get it right.

IRS guidance provides the 2024 depreciation limits for “luxury” business vehicles. For vehicles placed in service in 2024, depreciation limits (including first-year bonus depreciation) are $20,400 for year one, $19,800 for year two, $11,900 for year three and $7,160 for each year after that. This includes passenger cars, as well as SUVs, trucks and vans if their gross vehicle weight (GVW) is 6,000 pounds or less. The IRS also announced lease inclusion amounts for lessees of passenger vehicles first leased in 2024. To read Rev. Proc. 2024-13: https://lnkd.in/ePqsNQXc Purchasing a heavier vehicle can offer tax advantages. New or used vehicles may be eligible for Sec. 179 expensing, which might allow you to deduct the entire cost. However, a reduced Sec. 179 limit ($30,500 for 2024) applies to vehicles (typically SUVs) with GVWs of more than 6,000 pounds but no more than 14,000 pounds. Also keep in mind that, if a vehicle is used for both business and personal purposes, depreciation must be allocated between deductible business use and nondeductible personal use. The depreciation limit is reduced if the business use is less than 100%. If business use is 50% or less, you can’t claim any bonus depreciation or Sec. 179 expensing. #AccountingFirm #LongIslandFirm #AccountingLongIsland #AccountantLongIsland #LongIslandAudit #GreatRiverAccountants #RockvilleCentreAccountants #WestchesterAccountants #AccountantsWestchester #AccountantWestchester #LongIsland #Westchester

2024 Depreciation Limits for Business Vehicles IRS guidance provides the 2024 depreciation limits for “luxury” business vehicles. For vehicles placed in service in 2024, depreciation limits (including first-year bonus depreciation) are $20,400 for year one, $19,800 for year two, $11,900 for year three, and $7,160 for each year after that. This includes passenger cars, as well as SUVs, trucks and vans if their gross vehicle weight (GVW) is 6,000 pounds or less. The IRS also announced lease inclusion amounts for lessees of passenger vehicles first leased in 2024. To read Rev. Proc. 2024-13: https://lnkd.in/ePqsNQXc Purchasing a heavier vehicle can offer tax advantages. New or used vehicles may be eligible for Sec. 179 expensing, which might allow you to deduct the entire cost. However, a reduced Sec. 179 limit ($30,500 for 2024) applies to vehicles (typically SUVs) with GVWs of more than 6,000 pounds but no more than 14,000 pounds. Also keep in mind that, if a vehicle is used for both business and personal purposes, depreciation must be allocated between deductible business use and nondeductible personal use. The depreciation limit is reduced if the business use is less than 100%. If business use is 50% or less, you can’t claim any bonus depreciation or Sec. 179 expensing. Contact the office at (925) 944-1881 for more information. #2024taxes #DepreciationLimits JGRCPA

Taxpayers that use cars, SUVs, pickups and vans for business purposes can deduct vehicle-related costs using standard mileage rates. However, most are better off deducting their actual expenses. The actual expense method requires you to calculate depreciation deductions, which can be complicated. Here are the basics to help you get it right. #taxplanning #businessvehicle #depreciation https://lnkd.in/g-3aFu9c

Taxpayers that use cars, SUVs, pickups, and vans for business purposes can deduct vehicle-related costs using standard mileage rates. However, most are better off deducting their actual expenses which requires you to calculate depreciation deductions. Here are the basics. https://lnkd.in/gs6dV2yg

IRS guidance provides 2024 depreciation limits for "luxury" business vehicles. For vehicles placed in service in 2024, the depreciation limits (including additional first-year depreciation) are $20,400 for the first year, $19,800 for the second year, $11,900 for the third year, and $7,160 for each year thereafter. This includes passenger cars, as well as SUVs, trucks and vans if their gross vehicle weight (GVW) is 6,000 pounds or less. The IRS also announced the lease inclusion amounts for lessees of passenger vehicles first leased in 2024. To read Rev. Proc. 2024-13: https://lnkd.in/ePqsNQXc Purchasing a heavier vehicle may offer tax advantages. New or used vehicles may be eligible for Sec. 179 expensing, which could allow you to deduct the entire cost. However, a reduced Sec. 179 limit ($30,500 by 2024) applies to vehicles (usually SUVs) with GVW over 6,000 pounds, but not more than 14,000 pounds. Also note that if a vehicle is used for both business and personal purposes, depreciation must be allocated between deductible business use and nondeductible personal use. The depreciation limit is reduced if the business use is less than 100%. If business use is 50% or less, you cannot claim any bonus depreciation or Sec. 179 expensing. If you have more doubts or questions do not hesitate to contact us today, we offer you the advice of experts in the field and you can have at your fingertips all the information in a clear way and the opportunities to opt for these bonuses. #TaxAdvantages #VehicleDepreciation #BusinessVehicleTax

IRS guidance provides 2024 depreciation limits for "luxury" business vehicles. For vehicles placed in service in 2024, the depreciation limits (including additional first-year depreciation) are $20,400 for the first year, $19,800 for the second year, $11,900 for the third year, and $7,160 for each year thereafter. This includes passenger cars, as well as SUVs, trucks and vans if their gross vehicle weight (GVW) is 6,000 pounds or less. The IRS also announced the lease inclusion amounts for lessees of passenger vehicles first leased in 2024. To read Rev. Proc. 2024-13: https://lnkd.in/eYSpeESK Purchasing a heavier vehicle may offer tax advantages. New or used vehicles may be eligible for Sec. 179 expensing, which could allow you to deduct the entire cost. However, a reduced Sec. 179 limit ($30,500 by 2024) applies to vehicles (usually SUVs) with GVW over 6,000 pounds, but not more than 14,000 pounds. Also note that if a vehicle is used for both business and personal purposes, depreciation must be allocated between deductible business use and nondeductible personal use. The depreciation limit is reduced if the business use is less than 100%. If business use is 50% or less, you cannot claim any bonus depreciation or Sec. 179 expensing. If you have more doubts or questions do not hesitate to contact us today, we offer you the advice of experts in the field and you can have at your fingertips all the information in a clear way and the opportunities to opt for these bonuses. #TaxAdvantages #VehicleDepreciation #BusinessVehicleTax

Car And Truck Expenses In the United States, business owners and individuals who use cars and trucks for business purposes can deduct certain expenses related to the use of these vehicles on their federal income tax returns. The Internal Revenue Service (IRS) provides guidelines on how to calculate and claim these deductions. Below are some key details about car and truck expenses in U.S. taxation: Business Use of Vehicles: Deductible Expenses: You can generally deduct the ordinary and necessary expenses for the business use of your vehicle. This includes expenses such as fuel, maintenance, repairs, insurance, depreciation, and lease payments. Recordkeeping: It's essential to keep detailed records of your vehicle expenses, including receipts, mileage logs, and any other relevant documentation. Methods for Calculating Deductions: Standard Mileage Rate: The IRS offers a standard mileage rate that can be used to calculate deductible vehicle expenses. As of my last knowledge update in January 2023, the standard mileage rate for business use is 65.5 cents per mile. You can multiply your business miles by this rate to determine your deduction. Actual Expenses: Alternatively, you can deduct the actual expenses associated with your vehicle. This includes costs like gas, oil, repairs, insurance, depreciation, and more. However, you need to calculate the percentage of business use for these expenses. Depreciation: If you own the vehicle and choose to deduct actual expenses, you may be eligible to deduct a portion of the vehicle's cost as depreciation over several years. The IRS provides guidelines on how to calculate and claim depreciation. Leased Vehicles: If you lease a vehicle for business use, you can usually deduct the business portion of the lease payments. However, if the lease is above a certain value, additional rules may apply. Recordkeeping and Documentation: Detailed records are crucial. Keep a log of your business mileage, noting the date, destination, purpose, and number of miles for each trip. Retain receipts for all vehicle-related expenses. Personal Use of Business Vehicles: If you use your vehicle for both business and personal purposes, you can only deduct the portion related to business use. Special Rules for Trucks and SUVs: Trucks and SUVs with a gross vehicle weight rating (GVWR) over 6,000 pounds may be eligible for different rules regarding depreciation and expensing. #ustaxpreparer #ustaxpreparation #carandtruckexpenses #ustaxation #taxadvisory

“I need to buy a car that’s over 6,000 lbs to write it off, right?” Not quite - and I would suggest you explore vehicles under 6,000 lbs as well. While everyone loves to write off 100% of a vehicle purchase, there are some upsides to consider with other vehicle depreciation strategies. First off, for vehicles under 6,000 lbs, the maximum you can bonus in the first year is $20,200.  This means that if you can buy an economical car under 6,000lbs, you can still write off the whole car!  But it doesn’t cost you an arm and a leg. Second, if you write off a car in the first year and then trade it in the next, you are simply shifting income from one year to the next and this may cause more headache than it is worth without proper planning. Third - don’t knock the mileage deduction.  For certain taxpayers the mileage deduction is great because it includes maintenance, gas and depreciation even if you don’t incur a lot of those expenses.  Plus it makes the bonus depreciation recapture simpler too. Don’t let the tax tail wag the dog when it comes to vehicle purchases. If you found this post helpful, please like and share! #taxes #realestate

Auto Depreciation Limitations Increase The IRS issued higher new depreciation limitations for passenger automobiles, although the increases are smaller than in the previous two years. These limits are updated annually for inflation, based on the automobile component of the chained consumer price index for urban consumers. Rev. Proc. 2024-13, released Tuesday, contains the Sec. 280F(a) inflation-adjusted dollar limitations on depreciation deductions for passenger automobiles — including trucks and vans — acquired after Sept. 27, 2017, and placed in service during 2024, for 2024 and each succeeding tax year. For passenger automobiles for which Sec. 168(k) additional first-year, or "bonus," depreciation is applied, the limitation is $20,400 for the first tax year, an increase of $200 from the 2023 amount. The increase from 2021 to 2022 and 2022 to 2023 was $1,000 each year. The succeeding-year limitations are $19,800 for the second tax year (an increase of $300 over 2023); $11,900 for the third year ($200 higher); and $7,160 for each year after that (an increase of $200). If bonus depreciation does not apply, the 2024 first-year limitation is $12,400 ($200 higher than 2023), and the succeeding years' limitations are the same as for vehicles eligible for the bonus depreciation.