Tax Deduction on SUV Cars

Contributor

By Matt V.
eHow Contributing Writer

Article Rating:

(0 Ratings)

Business owners who depend on sports utility vehicles (SUVs) to carry out their daily work-related activities are entitled to a tax break that covers depreciation and fuel expenses. The new deduction, although still helpful, is significantly less than what was offered in the past.

Old Rule

Until 2004 small business owners could deduct up to $100,000 from SUV expenses. This covered the price of the vehicle and depreciation costs for the first year of ownership.

New Rule

The rule enacted by congress post 2004 has limited the deductible amount. Now business owners can only deduct $50,000; $25,000 towards the price of the vehicle and $25,000 towards depreciation costs in the first year.

Requirements for the Tax Deduction

If a vehicle weighs over 6,001 lbs. it is technically an SUV. According to an article in the October 2004 issue of "Kiplinger's Personal Finance," the weight amount is expected to change to 14,000 lbs.

The Hummer Haven

According to the "Kiplinger's" article, the tax breaks literally allow small business owners to purchase Hummers without paying a dime. A proposition with which environmentalists raise contention.