Changes to Vehicle Depreciation

January 24, 2018 by Andy Graf
Copeland Buhl

The Tax Cuts and Jobs Act made changes to the limits on passenger automobiles placed in service after 2017.  These caps are often referred to as the “luxury auto limits” even though they generally affect vehicles that cost $18,000 and above and have a gross vehicle weight of less than 6,000 lbs.  The depreciation deduction for “luxury autos” are almost tripled.

Here are examples of how the new tax law changes will impact depreciation on these “luxury” autos:

New Law                                            Old Law

Year 1                            $18,000  ($10,000*)                           $11,160 ($3,160)

*if bonus not claimed

Year 2                                 $16,000                                               $5,100

Year 3                                 $9,600                                                 $3,050

Year 4 and beyond             $5,760                                                 $1,875


There were no major changes to depreciation on sport utility vehicles, or trucks with a cargo bed of 6 feet or more if they have a gross vehicle weight in excess of 6,000 lbs.


If you would like to discuss any of these items or would like additional information, please give us a call.

Andy Graf, CPA

Copeland Buhl & Company PLLP

(952) 476-7100