Blog
Blog
๐ Bonus Depreciation Rules for Vehicles โ What Business Owners Need to Know in 2025 ๐
๐ Bonus Depreciation Rules for Vehicles โ What Business Owners Need to Know in 2025 ๐
Not all vehicles are created equal when it comes to tax savings. Hereโs how bonus depreciation plays out:
๐น Heavy Vehicles (GVWR > 6,000 lbs.)SUVs, pickups, and vans above this threshold can qualify for 100% bonus depreciationโa powerful deduction strategy for business owners.
๐น Luxury Passenger Autos (GVWR โค 6,000 lbs.)These vehicles are subject to luxury auto depreciation limits, capped as follows:
2025: $20,200 with bonus depreciation ($12,200 without)
2026: $19,600
2027: $11,800
Each year after: $7,060
๐ก Bonus depreciation applies only in the first year, so timing matters!
- The key takeaway: choosing the right vehicle for your business can make a big difference at tax time.
If youโre considering a vehicle purchase, make sure you understand whether it qualifies for full bonus depreciation or falls under luxury limits.