INFINITI Tax Advantages for Colorado Springs Businesses

TAX PLANNING CONSIDERATIONS WHEN BUYING AN INFINITI FOR YOUR BUSINESS

There are some very large tax savings you could receive by purchasing a qualifying INFINITI for your business use**.  Here is some general information about the program, however you should always consult your tax advisor for your individual situation.

ADVANTAGES OF BUYING A NEW INFINITI SUV

Thanks to the 100% first-year bonus depreciation deduction provided by the Tax Cuts and Job Act of 2017, if a vehicle is going to be used for business in 2018, there are significant tax advantages to consider. In general, for trucks and heavy SUVs, such as the INFINITI QX80, purchased after September 27, 2017 and used 100% for business, taxpayers get a depreciation deduction in the initial year equal to at least 100% of the cost of the new vehicle. The bonus depreciation is set to decrease to 80% for 2023, 60% for 2024, 40% for 2025 and 20% for 2026. In years 2027 and later, bonus depreciation is eliminated.
It is important to note that in order to receive these tax benefits, the vehicle will have to be used 100% for business purposes. If an automobile was used only 85% for business, the cost value that could be expensed is only 85% of the costs to acquire. For example, if a vehicle was purchased for $50,000, and each year 10,000 total miles are driven, with 8,500 miles being for business purposes, $42,500 would be the total deduction that would be allowed for the vehicle. This could be $42,500 in the initial year if bonus depreciation applies, $25,000 in the first year with 17,500 deducted throughout the life of the vehicle using the § 179 deduction, or the full $42,500 deducted over the next 5 years if no accelerated depreciation is elected.

Qualifying INFINITI SUV Inventory

ADVANTAGES OF BUYING A INFINITI CAR OR LIGHT SUV FOR YOUR BUSINESS

The first-year bonus depreciation break coupled with a generous expensing allowance will result in significant tax deductions for taxpayers who bought passenger autos after 2017 and used them for business.

With the Tax Cuts and Job Act of 2017, the first-year additional depreciation limit allowed when coupled with bonus depreciation remains at $8,000. Additionally, there is only one set of dollar limits for passenger autos placed in service after December 31, 2017. A passenger auto is defined as a car, such as the INFINITI Q50, Q60, or Q70 that is less than 6,000 pounds in unloaded gross vehicle weight or loaded gross vehicle weight for vehicles with a truck chassis. Due to their weight, the INFINITI QX30, QX50, and QX60 Crossovers and SUVs also fall into the passenger auto class.  The first-year limit on depreciation for passenger autos is $10,000 plus the $8,000 allowed if bonus depreciation is taken, for a total of $18,000. For example, if you purchased a new passenger auto for $30,000 during 2017 and used it 100% for business, you would be able to expense $18,000 in the first year. The remaining $12,000 would be deducted throughout the succeeding years in which the vehicle is owned.

Again, the deduction would reduce significantly if the favorable bonus depreciation is not extended past 2027. Assume the same facts above for the new passenger auto. You would only be eligible for the $10,000 deduction versus the total deduction of $18,000 when the special limit of $8,000 is no longer allowed due to the expiration of bonus depreciation.

Qualifying INFINITI Car & Crossover Inventory

NEW VERSUS USED

Please note, generally, the “section 179” expense and 100% bonus depreciation can be utilized on new or used qualified vehicles. The addition of used vehicles potentially being eligible for bonus depreciation was added under the Tax Cuts and Jobs Act of 2017.

TRADE-INS OF BUSINESS VEHICLES

It is important to remember that the Tax Cuts and Jobs Act of 2017 eliminated the taxpayer favorable treatment of like-kind exchanges under Code Sec. 1031 that was previously allowed. Taxpayers will now have a gain or loss on the traded-in auto, which will be dependent upon the trade-in value and remaining basis of the vehicle. The newly purchased vehicles depreciable cost will simply be its original net cost.

**Every business and individual has an unique tax situation, you should always consult your tax advisor for your individual situation.