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Need Some Deductions for 2012?
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Updated for 2012
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Depreciating Passenger Cars Weight-Rated 6,000 Pounds or Less
Cars, light trucks, vans, and SUVs weight-rated 6,000 pounds or less unloaded are subject to annual depreciation ceilings (limits).
When discussing depreciation, whether it's MACRS depreciation, bonus depreciation, or the Section 179 first-year expensing deduction, vehicles weight-rated 6,000 pounds or less are treated differently than other types of depreciable business property, including SUVs and trucks weighing more than 6,000.
Clarifying Annual Depreciation Limits
Depending on the type of depreciable business property, annual depreciation deductions may be limited to a specific amount.
Annual Depreciation Ceilings for Passenger Cars, Light Trucks, Vans, and SUVs weight-rated 6,000 or Less:
For passenger cars, light trucks, vans, and SUVs weight-rated 6,000 pounds or less, the annual depreciation ceilings for 2012 are:
- Passenger cars: $3,160
- Light trucks, vans, and SUVs: $3,360
A passenger car is defined as any four-wheeled vehicle that is manufactured primarily for use on public streets, roads and highways and is weight-rated by the manufacturer at 6,000 pounds or less when unloaded (without passengers or cargo).
Bonus Depreciation for Passenger Cars, Light Trucks, Vans, and SUVs weight-rated 6,000 or Less:
The first-year bonus depreciation deduction for 2012 for passenger cars, light trucks, vans, and SUVs 6,000 pounds or less is $8,000. The $8,000 bonus depreciation gets added to the regular annual depreciation ceilings.
By adding bonus depreciation to the regular annual depreciation ceilings, the annual ceiling is increased to:
- $11,160 ($3,160 plus $8,000) for passenger cars
- $8,360 ($3,360 plus $8,000) for light trucks, vans, and SUVs 6,000 pounds or less
Depreciation for Heavy Trucks and SUVs Weight-Rated More than 6,000 Pounds:
- Regular depreciation:
- There is no annual depreciation limit when claiming regular depreciation for depreciable business equipment.
- Section 179 deduction (first-year expensing):
- For heavy trucks and SUVs weight-rated more than 6,000 pounds, the Section 179 deduction for 2012 is limited to $25,000 if the vehicle was purchased and placed in service during 2012.
Next:
Car Expenses-Depreciation: Electric cars
Related Links
- The Mileage Allowance Method
- The Actual Expense Method
- Six Things to Know About Depreciating Your Car
- Depreciation Methods
- Depreciation Conventions
- Type of Vehicle Being Depreciated
- Heavy Trucks, Vans, and SUVs (weight-rated over 6,000 pounds)
- Electric Cars-Depreciation Limits
- Improvements Made to Vehicle
- Depreciation Recapture Rule
- Points to Keep in Mind Before Choosing a Depreciation Method
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