$25K Tax Deduction For Hummers, Excursions, Still In Place - AP

[hatrack]

OS ANGELES // New tax breaks are available to anyone who wants to help the environment by purchasing fuel-efficient hybrid vehicles. But if owners of small businesses really want to save money, they can get even bigger federal tax breaks by buying the largest gas-guzzling SUVs.

The disparity is drawing criticism from environmentalists and the Republican chairman of the Senate's tax-writing committee, who is working on a change. Dealers and owners who have benefited from the SUV tax incentive say it helps spur a key part of the economy - automaking - and allows small-business owners to purchase vehicles that improve their bottom line.

However, owners of small businesses who buy a Hummer, Ford Excursion or other SUV weighing more than 3 tons get a deduction of up to $25,000 - depending on tax bracket - if they use the vehicle exclusively for work. The benefits don't stop there. Once they subtract the $25,000 from the cost of their 3-ton SUV, small-business owners can deduct the depreciation on the remaining amount. Someone who bought a $60,000 SUV, for example, can claim the remaining $35,000 over six years.

No such luck for small-business owners who buy cars weighing less than 3 tons. No matter how much the vehicles cost, they can claim just $15,535 in depreciation over six years and $1,675 each additional year. Deductions for depreciation on trucks and vans weighing less than 3 tons are slightly more generous.

EDIT

http://www.baltimoresun.com/news/nationworld/bal-te.nat19feb19,0,4429008.story

[havocmom]

1. bushco's admonition to the nation to do something about oil addiction

only applies to the oil addicts who don't have a lot of money.

[acmejack]

2. Isn't that disgusting?

All the rich folks I know had to rush out last year & purchase new monsters to capitalize on said break. Deplorable, they are single issue voters too. Taxes. They care about nothing else, but their precious money, it dominates their existence.

It may be the only satisfying thing about the economy going into the crapper, the spectacle of materialists suddenly discovering that their valuables aren't.

[FloridaPat]

3. Those tax breaks on fuel-efficient vehicles are around $3500 and

only available on the first 60,000 or so vehicles from each country. On the other side though, a small business that buys a fuel-efficient hybrid can still take the cost off in depreciation. I don't know what the yearly breakdown is though. I am assuming the $25,000 is on the first year of ownership of the Hummer.