Buying a business vehicle before the end of the year may reduce your tax bill.
If you’re looking to reduce your 2014 tax bill, you may want to consider purchasing a business vehicle before the end of the year. Business-related purchases of new or used vehicles may be eligible for Section 179 expensing, which allows you to expense, rather than depreciate over a period of years, some or all of the vehicle’s cost.
The normal Sec. 179 expensing limit generally applies to vehicles weighing more than 14,000 pounds. The limit for 2014 is $25,000, and the break begins to phase out dollar-for-dollar when total asset acquisitions for the tax year exceed $200,000. These amounts have dropped significantly from their 2013 levels. But Congress may still revive higher Sec. 179 amounts for 2014, so watch for updates before you file.
Even when the normal Sec. 179 expensing limit is higher, a $25,000 limit applies to SUVs weighing more than 6,000 pounds but no more than 14,000 pounds. Vehicles weighing 6,000 pounds or less are subject to the passenger automobile limits. For 2014, the depreciation limit is $3,160.
Many additional rules and limits apply to these breaks. So if you’re considering a business vehicle purchase, contact the experts in our tax department or Jim Komos at 216.831.7171 or jkomos@cp-advisors.com to learn what tax benefits you might enjoy if you make the purchase by Dec. 31. Ciuni & Panichi, Inc. can help you start planning now.
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© 2014
