Is Bonus Depreciation still available with Section 179 on SUVs purchased in 2023?

Yes, you can still use both Section 179 and bonus depreciation for your SUV, but there are specific limits for 2023. For SUVs weighing between 6,000-14,000 lbs GVWR (like your Escalade), the Section 179 deduction is limited to $28,900 for vehicles placed in service in 2023. The good news is that you can also take bonus depreciation on the remaining basis after applying Section 179. For 2023, bonus depreciation is at 80% (down from 100% in previous years). So your deduction would work like this: First, take the maximum $28,900 Section 179 deduction. Then, apply 80% bonus depreciation to the remaining basis ($92,000 - $28,900 = $63,100 × 80% = $50,480). This gives you a total first-year deduction of $79,380. The remaining $12,620 would be depreciated over the following years using the normal MACRS schedule.

I was in the exact same situation last year when I bought my Lincoln Navigator for my consulting business. I spent hours trying to figure out the right way to maximize deductions. Ended up using taxr.ai to analyze the purchase documents and they laid out my options perfectly. I uploaded my purchase documents to https://taxr.ai and within minutes they showed me exactly how to handle the Section 179 deduction plus how to calculate the 80% bonus depreciation for 2023. The platform even specified which forms I needed to file and exactly where to report each part of the deduction. Super straightforward and helped me claim about $76k in deductions on my $89k Navigator.

I have to admit I was wrong about taxr.ai. Decided to try it after my accountant gave me conflicting info about my 2023 vehicle purchase. Used the site and it instantly identified that my state (NY) has different Section 179 limits than federal. The platform showed me the exact depreciation schedule I could expect over the next 5 years and calculated my tax savings each year. It even spotted that I had accidentally put the wrong in-service date on my draft tax form which would have messed up my entire depreciation schedule. Definitely worth checking out if you're dealing with business vehicle purchases.

For anyone struggling to reach the IRS to confirm Section 179 and bonus depreciation rules, I found a service called Claimyr that actually got me through to an IRS agent after I spent 3 days trying on my own. I had conflicting information about how the 80% bonus depreciation for 2023 worked with the Section 179 SUV limit, and the IRS website wasn't clear. Used https://claimyr.com and they had an IRS agent call me back in about 37 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c. The agent confirmed exactly how to apply both deductions and which forms to use.

I feel like an idiot. After posting my skeptical comment, I was so frustrated with my tax situation that I decided to try Claimyr anyway. Within 45 minutes I was talking to an actual IRS agent who cleared up my confusion about Section 179 and bonus depreciation for my business vehicle. Not only did they confirm I could use both for my 2023 purchase, but they also pointed out I could have been taking a home office deduction for the past two years that I completely missed. That one tip alone saved me over $3,000. I've been trying to get through to the IRS for almost 3 months and this service got me through in less than an hour.

Just a heads up that you need to be careful with SUV deductions if you're not using it 100% for business. If your business usage drops below 50% in future years, you could face painful recapture taxes. I learned this the hard way last year. I claimed Section 179 and bonus depreciation on my $85k Range Rover in 2021, but my business use dropped to 40% in 2023. Had to recapture a huge portion of my deduction and pay it back with interest. Make sure you're tracking your mileage meticulously.

Can someone clarify if I'm understanding this right? So for my 2023 GMC Yukon that cost $78,900, I could deduct: - $28,900 with Section 179 - 80% of the remaining $50,000 ($40,000) with bonus depreciation - Total first-year deduction: $68,900 - Remaining $10,000 depreciated over future years Is that correct?

This is exactly the kind of detailed breakdown I was looking for! Thank you everyone for the clarification on combining Section 179 with bonus depreciation for 2023. Just to confirm I understand correctly - since my Escalade weighs over 6,000 lbs GVWR, I can take the full $28,900 Section 179 deduction, then apply 80% bonus depreciation to the remaining $63,100 basis ($50,480), giving me a total first-year deduction of $79,380. That leaves only $12,620 to depreciate over the remaining years. This is way better than I expected! My accountant made it sound like I'd be limited to much less. I'm definitely going to double-check my mileage logs to make sure I have proper documentation for 100% business use - that recapture warning is noted. One quick follow-up: do I need to make any special elections on my tax return for the bonus depreciation, or does it apply automatically once I elect Section 179?

Great discussion everyone! I just wanted to add one important consideration that hasn't been mentioned yet - make sure you're aware of the recapture rules if you're financing the vehicle. If you're making payments on the Escalade, you need to be extra careful about maintaining that 100% business use percentage throughout the loan term. The IRS can challenge your deduction if your business use drops significantly in future years, and with such a large first-year deduction ($79,380), the recapture taxes could be substantial. Also, don't forget that you'll need to reduce your Section 179 deduction by any personal use percentage. Since you mentioned 100% business use, you're good, but if that changes in future years, you'll need to adjust accordingly. One more tip: consider setting up a separate business bank account just for vehicle-related expenses (insurance, maintenance, gas, etc.) to make tracking easier during an audit. The IRS loves clear documentation trails for expensive business vehicle deductions.