Understanding the Sport Utility Vehicle Expense Deduction: Do You Qualify?
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To save money on a sport utility vehicle, most people list SUVs as a business related expense, and they would get deductions on the cost by paying low taxes for the vehicle. Originally, SUVs weighing over 6,000 pounds qualified for tax deductions, while SUVs for families won't get any deductions.
For Whom this Rule was Made for?
This rule was originally intended for small farmers in the 1970s, who would have to buy heavy machinery to do their chores. To encourage farmers, the government decided to make all vehicles weighing over six thousand pounds tax deductible. The most tax deduction they can get is a hundred thousand dollars. With this rule, however, most SUVs became fully tax deductible in their first year.
How People took Advantage of it
After this rule was passed, self employed professionals such as doctors and lawyers decided to use that rule and buy SUVs such as Hummer, and they wrote that off as business related transactions. When watchdog groups saw this "fraud", they decided to complain to the government on how people were skipping taxes that could help feed the poor and the needy. Soon, environmentalists joined in this debate, claiming that this encouraged citizens to buy SUVs, which pollute the environment more than an average car.
The New Law
Congress decided to cut the hundred thousand dollar bonus to just twenty five thousand dollar bonus, but they kept the fifty percent bonus deduction, and the five year depreciation program, which made most SUVs fully tax deductible in their first year. However, to qualify for this, you would have to file a corporate tax return form to claim this deduction.
Current SUVs that Qualify for the Deduction
Right now, the SUVs that qualify for this grant are the Chevrolet Tahoe, the Cadillac Escalade, the BMW X5 and the Toyota Sequoia. However, if you want to get the taxes off, then you would have to talk to a public attorney or a tax attorney on how to obtain this tax write-off.
