Oct 3 in Taxes
$7K Tax Savings - Myth vs. Fact
Need a new car? Want to reduce your tax bill?
Myth: You can only take bonus depreciation on new cars used for your business.
Fact: You can take bonus depreciation on a pre-owned vehicle as long as it’s new to you! Bonus depreciation is a tax incentive that allows you to deduct 60% of the purchase price of the vehicle in the year it is placed in service.
PRO TIP: Make sure to document everything properly and ensure the vehicle is used predominantly for business purposes. Do not spend cash only to save on taxes, only use this when you need a new car.
The Math: You're in the 24% tax bracket. When purchasing a $50K vehicle, the 2024 deduction would be 60% or $30K in year one. 24% of $30K = $7K tax savings.
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$7K Tax Savings - Myth vs. Fact
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