Many of today’s sport utility vehicles that are more than 6,000 pounds in gross weight are not subject to the luxury auto rules. Owners using these vehicles for business historically have been able to utilize both the Sec 179 expense deduction and bonus depreciation, and have not had their depreciation deduction limited by annual caps since the Sec 179 expense limit is in excess of $100,000 and allows taxpayers to write off the entire business portion of an SUV’s cost in the first year.

The Sec 179 expense deduction is limited to $25,000 for sport utility vehicles rated at 14,000 pounds gross vehicle weight or less. The $25,000 represents a substantially higher amount than allowed for other vehicles that are subject to the luxury auto limits.

There are some complicated exclusions to the SUV restriction. They include vehicles that are designed for more than nine individuals, equipped with an open cargo area, etc. Please contact this office for further details.