The release of the IRS’s inflation-adjusted limitations on depreciation deductions for business use of passenger automobiles light trucks and vans first placed in service during the calendar year 2013 just helped tax planning.
While some depreciation limits are unchanged from 2012 other ceilings have increased by $100. Dollar limits for the 2013 year reflect the inflation adjustments both with the extension of bonus depreciation by ATRA and without. If bonus depreciation is allowed to lapse after 2013 as proposed by President Obama dollar limits would be lower for 2014 but still adjusted for inflation.
The maximum depreciation limits under Code Sec. 280F for passenger automobiles first placed in service during the 2013 calendar year are: $11160 for the first year ($3160 if bonus appreciation does not apply) $5100 for the second year $3050 for the third tax year and $1875 for each succeeding tax year. Trucks and vans placed in service during the 2013 calendar year have slightly higher maximum depreciation limits under Code Sec. 280F. Due to a loophole in the operative definition SUVs and pickup trucks with a gross vehicle weight rating (GVWR) in excess of 6000 pounds continue to be exempt from the luxury vehicle depreciation caps.
If you need more information on income tax preparation this year for your business contact our office and we will assist you in implementing the recent changes and expectations for business owners.