6 Things to Keep in Mind About Depreciation
1. When using your vehicle less than 100% for business you must allocate depreciation to business use.
2. Depreciation tables assume 100% business use. Therefore, whatever your depreciation would normally be based on 100% business use, you simply multiply that amount by your business-use percentage.
For example if your depreciation deduction was $2,000 based on 100% business use, and your business use percentage was 80%, you would deduct $1,600 (80% x $2,000).
3. The straight-line (SL) method provides equal annual deductions throughout the recovery period.
4. The declining balance (DB) method (200% or 150%) provides higher deductions than the straight-line method during the earlier recovery years.
5. The annual depreciation amounts for passenger cars, light trucks and vans are limited to specific annual amounts.
6. Heavy trucks and vans are not subject to annual depreciation limits.
- Return to the Business Deductions Table of Contents to find related links