Small Business Owners Can Write Off $75K On SUVs
DETROIT Monday January 20,2003; Sharon Silke Carty writing for Dow Jones reports that The Detroit News Monday said President Bush's new tax proposal will increase a loophole that will allow small business owners to write off up to $75,000 of their sport utilities vehicles.
The proposed tax cut would increase from $25,000 to $75,000 the amount small business owners could write off from their SUV purchases for business reasons. Doctors, lawyers and other professionals are among the business owners favored by the rule.
Internal Revenue Service rules say trucks, which are defined as any vehicle with a gross weight of more than 6,000 pounds, can be deducted, regardless of its business use.
The Detroit News said a business owner purchasing a Hummer H1 currently could write off $25,000 of the price as an equipment investment. Under a provision passed in Congress last year, another 30% of the remaining price, or $24,356, could also be deducted. The owner could then deduct 20% of the remaining price, or $11,366, under normal depreciation rules, making the total deduction $60,722. Under the new rules, the deduction would amount to $88,722.
A Hummer H1 costs about $106,000.