Usually, a married couple keeps “his” and “hers” automobiles. In other words, you drive your car, and your spouse drives a different car. This situation is even more common when one spouse uses a car mainly for business driving.
Strategy: Swap cars with your spouse. By trading places before year-end, you can potentially increase your annual depreciation tax deduction by thousands of dollars. Reason: You’re entitled to depreciation deductions for both cars—not just one.
What makes this strategy especially juicy this year is the 50% first-year bonus. This tax break, which was revived by the Protecting Americans from Tax Hikes (PATH) Act of 2015, is currently scheduled to drop to 40% in 2018 and 30% in 2019 before expiring in 2020.
Example: Say that you and your spouse bought new cars earlier this year. Your car cost $50,000 and your spouse’s car was $40,000, so both are treated as “luxury cars” for tax p...(register to read more)