Can I deduct my luxury vehicle as a business expense?

So it’s time to get a new car and you have a business need for the car. Did you know you may be able to deduct your vehicle purchase as a business expense? There are caveats to this of course since the IRS has limits on how much depreciation you can take each year on cars, but let’s get into how you may be able to do this…

1. You must have a business need for the vehicle

The IRS rule is that expenses must be ordinary and necessary to be deductible as a business expense. This means that the car must be needed in the day-to-day operations of your business.

2. Determine your business use percentage of the car.

3. Is your vehicle more or less than 6000 pounds?

It is always best to consult a CPA or someone who is knowledgeable about the tax code to determine what your options are.

Set some time to chat with our CPA here.