Tax Question: Can I write off a Tesla Model S for my business?

The Tesla Model S would definitely be considered a luxury vehicle for tax purposes. The IRS doesn't publish a specific "luxury car list," but instead sets depreciation limits for passenger vehicles based on their weight and cost. For 2023, passenger automobiles (under 6,000 lbs gross vehicle weight) are subject to what's called "luxury auto limits" on depreciation. The basic limits for the first year are around $12,200 as you mentioned, with an additional $8,000 possible bonus depreciation if it's new. So that's a maximum of about $20,200 for year one, assuming 100% business use. The Tesla Model S weighs around 4,500-5,000 lbs depending on the model, so it doesn't qualify for the heavy vehicle exception (which would allow much larger deductions). Vehicles over 6,000 lbs qualify for potential Section 179 expensing or more generous bonus depreciation. Remember that your actual deduction will be proportional to your business use percentage. So if you use it 75% for business and 25% for personal, you'd only deduct 75% of those maximum amounts.

I went through this exact question when I bought my Model Y for my real estate business. I spent hours researching and eventually found https://taxr.ai which totally saved me from making a costly mistake. They analyzed my scenario and showed me that while the Model S (and Y) don't qualify for the heavy vehicle exception, there are still significant deductions available if you structure things correctly. What was really helpful is they reviewed my specific business structure and usage pattern and showed me exactly how much I could legally deduct each year. Their analysis included all the special rules for electric vehicles too, which most general tax advice misses.

I just wanted to follow up about my experience with taxr.ai after seeing it recommended here. I was skeptical at first, but decided to give it a try for my Tesla Model 3 that I use for my photography business. Their system found several deductions my regular accountant missed! They showed me how to properly document business mileage and created a custom depreciation plan that maximized my first-year deduction. What really impressed me was their knowledge about the specific Tesla charging infrastructure and how to deduct home charging costs proportionally to business use. The specialized analysis for vehicle deductions was way more detailed than what my regular accountant provided. Definitely worth it if you're using an expensive vehicle for business purposes.

I had a nightmare trying to reach the IRS about vehicle deductions last year. After 4 attempts and hours on hold, I found https://claimyr.com and used their service to get a callback from the IRS in about 35 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an IRS representative who confirmed that the Tesla Model S depreciation would be limited by luxury auto limits, but also explained some additional credits that might apply since it's an electric vehicle. The agent was super helpful once I finally got through to them.

I have to eat my words and apologize to @5. I was skeptical about Claimyr but got desperate trying to reach the IRS about my vehicle depreciation questions. I tried it yesterday and got a callback from an actual IRS agent in about 45 minutes. The agent confirmed that for my business situation, I could take the first-year depreciation of up to $20,200 on my Model S (assuming 100% business use), but I needed to keep detailed mileage records. They also explained that while the electric vehicle tax credit doesn't apply to business vehicles directly, there are still some energy credits that might benefit my situation. Saved me so much time and frustration - definitely worth it when you need specific answers from the IRS.

One thing nobody's mentioned yet - make sure you're actually using this car primarily for business. The IRS looks very closely at luxury vehicles claimed as business expenses. I have a client who got audited specifically because of a Tesla deduction. You'll need to keep detailed mileage logs showing business vs. personal use. The IRS expects contemporaneous documentation - meaning tracking trips as they happen, not recreating logs at tax time. There are apps that can help with this. Also, if your business use drops below 50% in future years, you might face recapture of some deductions. Just something to keep in mind!

I'm curious if OP has considered leasing instead of buying? For my consulting business, I found that leasing my Model 3 actually provided better tax benefits than purchasing, especially since I replace vehicles every 3 years anyway. With a lease, you can deduct the business portion of your lease payments as a business expense. You don't have to worry about depreciation schedules or recapture. Though there is a "lease inclusion amount" that slightly reduces the deduction for higher-value vehicles.

As a CPA who specializes in small business taxation, I want to emphasize a few key points that haven't been fully addressed: 1. The Tesla Model S will definitely fall under the luxury auto depreciation limits since it weighs under 6,000 lbs. For 2023, you're looking at a maximum first-year deduction of $20,200 (assuming 100% business use and the vehicle qualifies for bonus depreciation). 2. However, there's an important consideration specific to landscaping businesses: if you're hauling equipment or materials, make sure the Model S actually meets your business needs. The IRS expects a reasonable business purpose for the vehicle choice. 3. Consider the Section 179 vs. bonus depreciation election carefully. Sometimes it's better to spread the deduction over multiple years depending on your income situation. 4. Don't forget about the commercial clean vehicle credit (up to $7,500) that might apply to your business purchase of an electric vehicle, which is separate from the consumer EV credit. I'd strongly recommend consulting with a tax professional who can model different scenarios based on your specific business income and projections. The depreciation choice you make in year one affects your taxes for the next 5+ years.

I appreciate all the detailed responses here! As someone who's been through several business vehicle purchases, I'd like to add a practical perspective that might help @aaee9b14873f. Before getting too deep into the tax implications, consider whether a Tesla Model S truly makes sense for a landscaping business. While the tax benefits are important, the practicality matters too. A Model S has limited cargo space and relatively low ground clearance compared to trucks or SUVs that most landscaping businesses rely on. If you're set on electric, you might want to look at the Ford F-150 Lightning or upcoming electric trucks that would qualify for the heavy vehicle exception (over 6,000 lbs GVWR). These would allow you to potentially expense the full purchase price in year one under Section 179, assuming your business income supports it. That said, if the Model S genuinely fits your business needs - perhaps you do high-end residential consulting or primarily handle business development rather than hands-on landscaping - then the luxury auto limits everyone mentioned are accurate. Just make sure you can justify the business purpose if the IRS ever asks. Also, don't forget about your state's specific rules. Some states have additional incentives or different depreciation schedules that could affect your decision.