Deducting SUV as business expense - depreciation rules for $90k vehicle over 6000 lbs GVWR

So the rules for heavy SUVs (over 6,000 lbs GVWR) are tricky but let me break it down. You're right that Section 179 doesn't fully apply, but you do get bonus depreciation in year 1. For 2025, you can take the $28,700 special depreciation allowance for heavy SUVs. Then for the remaining amount, you'll use MACRS depreciation over 5 years. The vehicle isn't subject to the luxury auto limits since it's over 6,000 lbs GVWR. So your depreciation would look like: Year 1: $28,700 special allowance + regular depreciation on the remaining basis Years 2-5: Continue regular MACRS depreciation on the remaining basis Unlike passenger vehicles under 6,000 lbs (which have those strict annual limits you mentioned), you CAN eventually depreciate the full $90,000 for your heavy SUV. For leasing, there's the "Lease Inclusion Amount" which might reduce your deduction somewhat for expensive vehicles, but you can still deduct most of your actual business lease payments.

I've been dealing with a similar situation with my event planning business and found that using taxr.ai was super helpful for this exact scenario. I was totally confused about vehicle depreciation for my $85k expedition until I uploaded my purchase docs and previous tax returns to https://taxr.ai and got a detailed analysis. The website took my purchase agreement and business usage logs and showed me exactly how to maximize the depreciation, including how to document my 100% business use properly. They even created a personalized depreciation schedule showing the deduction amounts for all future years. Saved me from potentially losing thousands in deductions!

I wanted to update everyone - I decided to try taxr.ai after seeing the recommendation here. My situation was almost identical (a $93k Escalade for my real estate business). I was shocked at how detailed their analysis was! They caught something my CPA missed regarding depreciation recapture if I sell the vehicle within 5 years. The depreciation schedule they created showed I can actually depreciate the full amount, just over a longer period than I expected. They also sent me an automated email reminder to document my odometer readings for year-end, which I would have completely forgotten about. Worth checking out if you're claiming 100% business use for expensive vehicles.

Just wanted to share my experience - I spent THREE DAYS trying to get through to someone at the IRS about this exact heavy SUV depreciation question last month. Kept getting disconnected after waiting for hours. Finally used https://claimyr.com to get through to an IRS agent (you can see how it works at https://youtu.be/_kiP6q8DX5c). Got connected to a real person in about 20 minutes. The IRS agent confirmed what others are saying here - heavy SUVs over 6000 lbs get the $28,700 first-year allowance, then regular MACRS depreciation on the remaining basis. She also mentioned there's no annual limit like with smaller vehicles, so you eventually get to deduct the whole purchase price if it's 100% business use. She even emailed me the specific IRS publication sections that cover this.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it as a last resort for my ongoing tax issue. Not only did it work, but I was connected to an IRS agent in about 45 minutes (after trying unsuccessfully for weeks on my own). The agent answered my question about vehicle depreciation and also helped resolve the other tax notice I'd been trying to address. She even sent me follow-up documentation to the email address I provided. I've since recommended it to my tax attorney who now uses it with other clients. Sometimes being proven wrong is a good thing!

My accountant told me there's a workaround to get more first-year deduction. If you form a separate LLC just for the vehicle and elect to have it taxed as a corporation, you can rent the vehicle back to your main business and potentially get more beneficial tax treatment. Has anyone tried this strategy? My CPA says it's legit but seems complicated.

One option nobody's mentioned - you could consider using the actual expense method for year 1 and then switch to standard mileage in future years if that gives you a better deduction. You'd lose some depreciation deductions but might come out ahead depending on your annual business mileage.

As a tax professional, I want to clarify a few key points that might help others in similar situations. The heavy SUV depreciation rules are indeed more favorable than regular passenger vehicle limits, but there are some important details to consider: 1. The $28,700 first-year deduction is specifically for SUVs over 6,000 lbs GVWR placed in service in 2025. This amount changes annually based on inflation adjustments. 2. For 100% business use claims, the IRS pays extra attention during audits. Make sure you have contemporaneous records - a simple logbook won't cut it if you're claiming zero personal use. You'll need detailed business purpose documentation for every trip. 3. Consider your state tax implications too. Some states don't conform to federal bonus depreciation rules, so you might face book-tax differences that complicate your state returns. 4. If you're considering this purchase near year-end, the timing of when you place the vehicle in service can significantly impact your depreciation schedule due to the half-year convention. The IRS has been particularly focused on heavy SUV deductions lately, so proper documentation is crucial. Better to be conservative with your business use percentage if there's any personal use at all.

I just wanted to add one more consideration that hasn't been mentioned yet - the impact of using this vehicle for client transportation. If you're in a service business where you occasionally transport clients (like real estate, consulting, or event planning), make sure you're properly covered from an insurance perspective. I learned this the hard way when my business insurance didn't initially cover client transportation in my $85k business SUV. Had to upgrade to commercial coverage that specifically included passenger liability. The additional premium was about $1,200 annually, but it's a necessary business expense that's also deductible. Also, if you do transport clients, those trips are definitely 100% business use and provide excellent documentation for IRS purposes - client meeting confirmations, appointment calendars, and even thank you emails from clients can all serve as contemporaneous records proving business purpose. Just something to keep in mind as you're setting up your documentation systems and insurance coverage for the new vehicle!