Doctors and Business Owners who purchased a business car in 2014 will be able to boost their tax savings using the $8,000 increase in first-year depreciation, thanks to the recent extension of bonus depreciation. Doctors who purchased a heavy SUV or pickup (Gross Vehicular Weight Rating over 6,000 pounds) by December 31, 2014 are eligible for even greater tax breaks.
Assume a doctor or Business Owner purchased a new SUV for $60,000 in 2014. First, the doctor or business owner can expense $25,000, the cap for SUVs. One-half of the remaining $35,000 cost, or $17,500, can be deducted using bonus depreciation. Another 20% of the $17,500 remaining balance, or $3,500, can be claimed as normal depreciation. Accordingly, with 100% business use, the total 2014 write-off for a $60,000 SUV purchase is $46,000. If the doctor or business owner purchased a used, rather than new SUV, bonus depreciation cannot be claimed, although the other tax breaks remain available.
Information only, please run this by your Professional Tax Advisor to implement.
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