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๐Ÿš— Bonus Depreciation Rules for Vehicles โ€“ What Business Owners Need to Know in 2025 ๐Ÿš—

๐Ÿš— Bonus Depreciation Rules for Vehicles โ€“ What Business Owners Need to Know in 2025 ๐Ÿš—

Not all vehicles are created equal when it comes to tax savings. Hereโ€™s how bonus depreciation plays out:

๐Ÿ”น Heavy Vehicles (GVWR > 6,000 lbs.)SUVs, pickups, and vans above this threshold can qualify for 100% bonus depreciationโ€”a powerful deduction strategy for business owners.

๐Ÿ”น Luxury Passenger Autos (GVWR โ‰ค 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

๐Ÿ’ก 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 youโ€™re considering a vehicle purchase, make sure you understand whether it qualifies for full bonus depreciation or falls under luxury limits.