Looking for ways to lower this year’s tax return? As you may have heard, small businesses can claim substantial deductions for SUVs, trucks, and vans that have a manufacturer’s gross weight rating (GVWR) above 6,000 pounds. Examples of these vehicles include the Chevy Tahoe and Ford F150 pickups. You can verify a vehicle’s GVWR by checking the label on the inside edge of the driver’s door.
Purchasing a new vehicle at the end of the year just might be the best option for you. With manufacturers trying to sell leftover inventory models before the year is out, many are offering discounts, incentives, and year end promotions. Also, many dealerships are open to negotiation this time of year which means you could land a really great deal. In addition to all the year end holiday sales, purchasing a qualified vehicle could get you a tax break!
The name of this tax break is the Section 179 depreciation deduction, and it can decrease both your federal income tax and self-employment tax bills.
Click here for a list of Vehicles over the 6,000 lb. GVWR limit. Talk with your tax advisor to confirm eligibility of a specific vehicle. All in all, December 2010 is a fantastic month to purchase a new vehicle.