2017 inflation Adjustments to Vehicle Depreciation
The IRS on Friday March 24th issued the 2017 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F (Rev. Proc. 2017-29).
This yearâ€™s guidance includes figures for vehicles that are placed in service in 2017 and to which first-year bonus depreciation applies. For passenger automobiles (other than trucks or vans) placed in service during calendar year 2017, the depreciation limit under Sec. 280F(d)(7) is $11,160 for the first tax year, including bonus depreciation, and $3,160 if bonus depreciation does not apply.
For trucks and vans, the limit is $11,560 for the first tax year if bonus depreciation applies and $3,560 if it does not apply.
For passenger automobiles, the limits are $5,100 for the second tax year, $3,050 for the third tax year, and $1,875 for each successive tax year. For trucks and vans, the limits are $5,700 for the second tax year, $3,450 for the third tax year, and $2,075 for each successive tax year.
Standard Mileage Rates in 2017 have dropped
Additionally standard mileage rates for business use of a vehicle dropped slightly in 2017. For business use of a car, van, pickup truck, or panel truck, the rate for 2017 is 53.5 cents per mile, down from 54 cents per mile in 2016. Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile.
Driving for medical or moving purposes may be deducted at 17 cents per mile, which is two cents lower than for 2016. The rate for service to a charitable organization is unchanged, set by statute at 14 cents per mile (Sec. 170(i)).
Make sure you are getting the most out of your vehicles on your taxes. Did you know your personal vehicle may even qualify as a service vehicle with tax deductible benefits if your a small business owner? Make sure your taxes get done right, and never miss a deduction – If you have questions, or you need tax assistance, contact us today!
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