Bonus Depreciation has been a favorite for extra deductions on business vehicles
2022 is the last year for 100% bonus depreciation for new and used assets purchased and placed in service during the year. The Tax Cuts and Jobs Act increased bonus depreciation from 50% to 100% through 2022 and it will decrease by 20% per year through 2026. The IRS puts limits on how much you can deduct for certain vehicles (Section 179 has limits on them as well). This law however left a beautiful tax saving opportunity for business owners who purchase a truck, van or SUV for their business with a GVW over 6,000 pounds. It can be 100% deducted (limited by business use %) in 2022. Limits are increased for “luxury automobiles” from $10k to $18k for 2022 bonus depreciation.
If you exceeded the maximum 179 deduction, you can elect to use bonus depreciation for the amounts exceeding 179 limits.