A $24,000 Christmas present for you
Miss this article and you may lose a $24K tax deduction in 2002
Detroit News/Wall Street Journal reports loophole gets SUV drivers huge deduction
Highlights from the Detroit news article by By Jeff Plungis
"This is one of the most lucrative breaks in the tax code," Roder said. "We're making it a fiscal no-brainer for businesses to buy giant SUVs."
Here's how the SUV tax break works:
Suppose a business owner wants to purchase a $45,000 luxury SUV for use in his business. He or she could write off $24,000 of the cost under section 179 of the tax code as accelerated depreciation. Then the buyer could write off additional depreciation of the remaining $21,000 under a five-year schedule -- 20 percent, or $4,200, in the first year.
That's a total $28,200 tax write-off.
The balance of the vehicle could be written off over the next five years. A more expensive large vehicle, like a Mercedes E-class SUV, a Range Rover or a BMW X5, would qualify for an even greater tax break.
The break for trucks got bigger this year under a schedule Congress adopted in 1996 when businesses could claim $17,500 in accelerated depreciation on equipment.
That lump sum increased to $20,000 last year. It went up to $24,000 this year. Next year and thereafter the deduction will be $25,000.
*Eligible vehicles (**Auto Spies added certain vehicles that qualify that were missing from the list i.e. MB G500)
Here are the 38 light truck models that qualify for an extra $24,000 accelerated depreciation tax break:
|
|