From a tax perspective, the time may be right to buy a new (not used) vehicle for business driving.
Strategy: Place the vehicle in service before 2009. Reason: It qualifies for the new—but temporary—50% first-year bonus .
Normally, deductions for business vehicles are strictly limited by the “luxury car” rules. But, thanks to bonus depreciation, you can claim a five-figure write-off for purchases this year. Here is a side-by-side comparison of the 2008 limits (based on 100% business use).
Limit without Limit with
Type of vehicle bonus depreciation bonus depreciation
Automobile $2,960 $10,960
Light truck or van $3,160 $11,160
Example: If you buy a new (not used) light truck or van before year-end and use it 90% for business, your 2008 deduction is a healthy $10,044 (90% of $11,160).
Note that the luxury car limits don’t apply to certain heavy-duty vehicles weighing more than 6,000 pounds. Therefore, you can write off the entire business portion of the cost under .
Tip: Congress has threatened several times to close this tax loophole, but it hasn’t happened yet.
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