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IRS sets new vehicle limits

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in Small Business Tax,Small Business Tax Deduction Strategies

The IRS recently announced new depreciation limits for vehicles placed in service in 2010. (IRS Revenue Procedure 2010-18)

The limits under the “luxury car rules” are comparable to the ones for 2009 except that you can no longer qualify for 50% bonus depreciation.

Here’s a quick summary of the maximum depreciation deductions for 2010 assuming 100% business use.


Passenger autos

Trucks and vans

First tax year



Second tax year



Third tax year



Each succeeding tax year



The IRS announcement also establishes the new “inclusion amounts” you must report on leased vehicles costing more than $16,700. New break: The inclusion amounts for leased vehicles placed in service in 2010 are about 20% less than the amounts for the prior year.

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