As of now, 2023 is the last year you can take up to 80% bonus depreciation. Next year the max eligible bonus depreciation deduction will be 60% and will drop 20% each year after until completely phased out. That is unless new laws are put into place to keep bonus depreciation or bring it back to higher levels we've seen in the past.
One of the most popular uses of bonus depreciation is on heavy SUV's (vehicles that weigh over 6,000 pounds in gross vehicle weight). If you're in the market for a new car, consider buying one that weighs over 6,000 pounds. If you do this and place the vehicle into service for business use before 12/31/23 you can take bonus depreciation on that vehicle and deduct that against your 2023 business income. The deduction will be based on the business use percentage.
The tax savings can be substantial. Let's say you buy a car for $80,000 and you use that vehicle 90% for business. You are eligible to take a $57,600 deduction against your business income.
Assuming you're in the 35% tax bracket, the actual tax savings are $20,160. Like I said, pretty substantial.
You can take bonus depreciation if you buy the car in cash or if you finance it.
Just remember that if you do decide to buy a new car this year, make sure it's placed into service before 12/31.
If you have questions, please let me know.