Tax Article - Tax Savings: Heavy SUV and Hybrid Vehicle Purchase

Are you thinking of buying a heavy SUV between 6,000 and 14,000 pounds for your business? 

You may well be better off buying the vehicle in 2007 rather than waiting until 2008.  Currently, up to $25,000 cost can be immediately expensed and the balance depreciated.  This can generate an immediate deduction of $30,000 in the case of an SUV costing $50,000.  That same vehicle will generate a deduction of $3,060 if purchased in 2008.  This is because the $25,000 Section 179 deduction for these vehicles will apply in 2007 but may not in 2008 if certain pending tax legislation is passed.

Speaking of motor vehicles, don’t forget the tax credit for certification of certain hybrid vehicles.  The IRS acknowledged the certification by Toyota that several of its Model Year 2008 vehicles qualify for the hybrid vehicle tax credits if such vehicles were purchased prior to October 1, 2007.  For example, credits ranging from $450 to $787 are available for certain 2008 Toyota Hybrid vehicles including the Prius Hybrid, Camry Hybrid, Highlander Hybrid, and Lexus Hybrid, if purchased after March 31, 2007, and before October 1, 2007.   In addition, credits ranging from $1,950 to $$3,000 are available for certain Fords purchased through December 31, 2007.  Credits are also available for certain Hybrid vehicles made by GM and Honda.

Please contact Feeley & Driscoll's Boston Accounting Firm by Email or call us at 1 (888) 875-9770.

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