Small Business Taxes & Management

Auto and Vehicle Tables

 

Small Business Taxes & ManagementTM--Copyright 2020, A/N Group, Inc.

 

 

Standard Mileage Rates

Built into the standard mileage rate is an implied amount of depreciation. You generally don't have to worry about the number until you sell the car. See the table Depreciation Adjustment for Standard Mileage Rate, below.

                                      2021      2020      2019      2018     2017    2016    2015              
Business mileage (cents per mile)     56.0      57.5       58       54.5     53.5     54     57.5          
Charitable mileage                     14        14        14        14       14      14      14     
Medical mileage                        16        17        20        18       17      19      23            
Moving mileage                         16        17        20        18       17      19      23       

Note: The deduction for moving expenses has been generally suspended until 2026. An exception applies to members of the Armed Forces on active duty pursuant to a military order and a permanent change of station.

 

Qualified Plug-In Electric Drive Motor Vehicle Credit

Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks. For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.

The credit begins to phase out for a manufacturer's vehicles when at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009). The list is frequently updated. You can find the list of vehicles qualifying for the credit and other related information at New Qualified Plug-In Electric Drive Motor Vehicle Credit.

 

Cents-Per-Mile Valuation Rule

When valuing personal use of a company auto (i.e., computing the value to put on the employee's W-2 for personal use), the standard mileage rate above can be used only if the fair market value of the auto when first made available to the employee does not exceed a specified maximum. The table below shows the maximum for the indicated years. (Reg. Sec. 1.61-21(d)) See Notice 2019-08 (IRB 2019-03) for an explanation of the large increase for 2018.

Year             Auto Max. Value    Truck/Van Max. Value

2021                 $51,100               $51,100
2020                  50,400                50,400
2019                  50,400                50,400
2018                  50,000                50,000
2017                  15,900                17,800
2016                  15,900                17,700
2015                  16,000                17,500
2014                  16,000                17,300
2013                  16,000                17,000
2012                  15,900                16,700
2011                  15,300                16,200
2010                  15,300                16,000


Where Fleet-Average Valuation Rule Used
Year             Auto Max. Value    Truck/Van Max. Value

2021                $51,100                $51,100
2020                 50,400                 50,400 
2019                 50,400                 50,400
2018                 50,000                 50,000
2017                 21,100                 23,300
2016                 21,200                 23,000  
2015                 21,300                 22,900
2014                 21,300                 22,600          

 

Computing the Fair Market Value of Auto or Light Truck

What's the fair market value of a new car? . . . The question is more than academic. The value is important if you're an employer and provide a car for an employee's use, if you lease a car, etc. You can use the cost of the vehicle as the fair market value, as long as the purchase is in an arm's length transaction. There are two safe harbors. You can use the manufacturer's suggested retail price less 8% or the manufacturer's invoice price plus 4%. Add sales tax and title fees to the price.

 

Depreciation Adjustment for Standard Mileage Rate

Year                  Depreciation per mile

2021                           26 cents per mile
2020                           27 
2019                           26       
2018                           25 
2017                           25 
2016                           24 
2015                           24 
2014                           22 
2012-2013                      23 
2011                           22 
2010                           23 
2008-2009                      21 
2007                           19 
2005-2006                      17 
2003-2004                      16   
2001-2003                      15 
2000                           14 


Example--You purchased a car in 2010 and use the car for business purposes 10,000 miles per year in 2013, 2014, 2015, 2016, 2017 and 2018. You sold the car on January 1, 2019. You've got to reduce your cost basis by $14,300 (10,000 x 0.23 for 2013, 10,000 x 0.22 for 2014, 0.24 x 10,000 for 2015 and 2016, and 0.25 x 10,000 for 2017 and 2018). If the reduction is large enough, you might end up having to report a profit on the sale of the car.

 

Depreciation Limits for Cars 2020

Depreciation on autos is limited. For vehicles first placed in service in 2020 there are two tables and the limit depends on when the auto was purchased and whether bonus depreciation applies. See the examples below.


 Depreciation Limits for Passenger Automobiles Acquired After September 27, 2017
     and Placed in Service During Calendar Year 2020 for which Additional First Year Depreciation Applies

Tax Year                  Depreciation

First                       $18,100
Second                       16,100
Third                         9,700
Subsequent                    5,760


         Depreciation Limits for Passenger Automobiles Placed in Service
      During Calendar Year 2020 for which Additional First Year Depreciation Does Not Apply

Tax Year                  Depreciation

First                       $10,100
Second                       16,100
Third                         9,700
Subsequent                    5,760


Depreciation Limits for Cars 2019

Depreciation on autos is limited. For vehicles first placed in service in 2019 there are three tables and the limit depends on when the auto was purchased and whether bonus depreciation applies. See the examples below.

     
       Depreciation Limits for Passenger Automobiles Acquired After September 27, 2017
     and Placed in Service During Calendar Year 2019 for which Additional First Year Depreciation Applies

Tax Year                  Depreciation

First                       $18,100
Second                       16,100
Third                         9,700
Subsequent                    5,760


         Depreciation Limits for Passenger Automobiles Placed in Service
      During Calendar Year 2019 for which Additional First Year Depreciation Does Not Apply

Tax Year                  Depreciation

First                       $10,100
Second                       16,100
Third                         9,700
Subsequent                    5,760

  Depreciation Limits for Passenger Automobiles Acquired Before September 28, 2017
     and Placed in Service During Calendar Year 2019 for which Additional First Year Depreciation Applies

Tax Year                  Depreciation

First                       $14,900
Second                       16,100
Third                         9,700
Subsequent                    5,760

Example: Madison Inc. purchases a new auto on February 2019 for $38,000. The vehicle is used 100% for business. Madison can use 100% bonus depreciation for the auto. Because it's an auto and subject to the limitation, the depreciation for 2019 is limited to $18,100. For 2020 Madison's depreciation is limited to $16,100. Madison can take the remainder of the depreciation ($3,800) in the third. (If the vehicle is used less than 100% for business, the limitation is adjusted accordingly.)

Example: The facts are the same as in the example above except the vehicle is used only 45% for business. Because the vehicle is not used perdominantly for business, bonus depreciation is not applicable and first-year depreciation is limited to $10,100; depreciation in the second year is limited to $16,100. Depreciation must also be adjusted for the reduced business use.

See below for special notes on the definitions for SUVs, trucks, and vans.

 

Depreciation Limits for Cars 2018

Depreciation on is limited. For vehicles first placed in service in 2018 there are three tables and the limit depends on when the auto was purchased and whether bonus depreciation applies. See the examples below.

       Depreciation Limits for Passenger Automobiles Acquired Before September 28, 2017
     and Placed in Service During Calendar Year 2018 for which Bonus Depreciation Applies

Tax Year                  Depreciation

First                       $16,400
Second                       16,000
Third                         9,600
Subsequent                    5,760


       Depreciation Limits for Passenger Automobiles Acquired After September 27, 2017
     and Placed in Service During Calendar Year 2018 for which Bonus Depreciation Applies

Tax Year                  Depreciation

First                       $18,000
Second                       16,000
Third                         9,600
Subsequent                    5,760


         Depreciation Limits for Passenger Automobiles Placed in Service
      During Calendar Year 2018 for which Bonus Depreciation Does Not Apply

Tax Year                  Depreciation

First                       $10,000
Second                       16,000
Third                         9,600
Subsequent                    5,760

Example: Madison Inc. purchases a new auto on December 20, 2017 for $38,000. The vehicle is not placed in service until calendar year 2018 at which time it's used 100% for business. Madison can use 100% bonus depreciation for the auto. Because it's an auto and subject to the limitation, the depreciation for 2018 is limited to $18,000. For 2019 Madison's depreciation is limited to $16,000. Madison can take the remainder of the depreciation ($4,000) in the third. (If the vehicle is used less than 100% for business, the limitation is adjusted accordingly.)

Example: The facts are the same as in the example above except the vehicle is used only 45% for business. Because the vehicle is not used perdominantly for business, bonus depreciation is not applicable and first-year depreciation is limited to $10,000; depreciation in the second year is limited to $16,000. Depreciation is adjusted for the reduced business use.

See below for special notes on the definitions for SUVs, trucks, and vans.

 

Depreciation Limits for Cars and Trucks 2017

Depreciation on cars and light trucks and vans is limited. There are two different limits--one for cars and one for trucks. Since 50% bonus depreciation is not currently available there is only one set of limits for cars and another for trucks. (Special tables, not reproduced here, apply to pure electric vehicles.)

           Depreciation Limits for Passenger Automobiles

Tax Year          Standard        50% Bonus

First             $3,160           $11,160
Second             5,100             5,100 
Third              3,050             3,050
Subsequent         1,875             1,875


             Depreciation Limits for Trucks and Vans

Tax Year          Standard        50% Bonus

First             $3,560           $11,560
Second             5,700             5,700 
Third              3,450             3,450
Subsequent         2,075             2,075

Example: You purchased a new car in June 2017 for $41,000. No matter how expensive the vehicle, your maximum depreciation in the first year (2017) is $11,160. (The deduction for a used car would be no more than $3,160 in the first year.) Your maximum depreciation in subsequent years is limited to the amounts indicated. The first-year limit also applies to any Sec. 179 expense option.

Note 1: The limitation on trucks and vans in the table above refers to passenger autos that are built on a truck chassis, including minivans and sport utility vehicles (SUVs) that are built on a truck chassis. Trucks and vans that are over the 6,000 pound loaded gross vehicle weight and qualified nonpersonal use vehicles are not subject to any depreciation limits. In order to qualify, the vehicle must be a qualified nonpersonal use vehicle. For trucks and vans, a qualified nonpersonal use vehicle is one that has been specially modified, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name, so that they are not likely to be used more than a de minimis amount for personal purposes. These specially manufactured or modified vehicles do not provide significant elements of personal benefit, and a taxpayer is unlikely to purchase these vehicles unless motivated by a valid business purpose that could not be met with a less-expensive vehicle. To be sure if you vehicle qualifies, check with your tax advisor.

Note 2: The Sec. 179 deduction for SUVs that meet the 6,000 pound loaded gross vehicle weight requirement purchased after October 22, 2004 is limited to $25,000. The SUV limit applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds GVW. However, the $25,000 limit does not apply to any vehicle:

 

Depreciation Limits for Cars and Trucks 2016

Depreciation on cars and light trucks and vans is limited. There are two different limits--one for cars and one for trucks. Since 50% bonus depreciation is not currently available there is only one set of limits for cars and another for trucks. (Special tables, not reproduced here, apply to pure electric vehicles.)

           Depreciation Limits for Passenger Automobiles

Tax Year          Standard        50% Bonus

First             $3,160           $11,160
Second             5,100             5,100 
Third              3,050             3,050
Subsequent         1,875             1,875


             Depreciation Limits for Trucks and Vans

Tax Year          Standard        50% Bonus

First             $3,560           $11,560
Second             5,700             5,700 
Third              3,350             3,350
Subsequent         2,075             2,075

Example: You purchased a new car in June 2016 $41,000. No matter how expensive the vehicle, your maximum depreciation in the first year (2016) is $11,160. (The deduction for a used car would be no more than $3,160 in the first year.) Your maximum depreciation in subsequent years is limited to the amounts indicated. The first-year limit also applies to any Sec. 179 expense option.

Note 1: The limitation on trucks and vans in the table above refers to passenger autos that are built on a truck chassis, including minivans and sport utility vehicles (SUVs) that are built on a truck chassis. Trucks and vans that are over the 6,000 pound loaded gross vehicle weight and qualified nonpersonal use vehicles are not subject to any depreciation limits. In order to qualify, the vehicle must be a qualified nonpersonal use vehicle. For trucks and vans, a qualified nonpersonal use vehicle is one that has been specially modified, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name, so that they are not likely to be used more than a de minimis amount for personal purposes. These specially manufactured or modified vehicles do not provide significant elements of personal benefit, and a taxpayer is unlikely to purchase these vehicles unless motivated by a valid business purpose that could not be met with a less-expensive vehicle. To be sure if you vehicle qualifies, check with your tax advisor.

Note 2: The Sec. 179 deduction for SUVs that meet the 6,000 pound loaded gross vehicle weight requirement purchased after October 22, 2004 is limited to $25,000. The SUV limit applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds GVW. However, the $25,000 limit does not apply to any vehicle:

 

Depreciation Limits for Cars and Trucks 2015

Depreciation on cars and light trucks and vans is limited. There are two different limits--one for cars and one for trucks. Since 50% bonus depreciation is not currently available there is only one set of limits for cars and another for trucks. (Special tables, not reproduced here, apply to pure electric vehicles.)

           Depreciation Limits for Passenger Automobiles

Tax Year          Standard        50% Bonus

First             $3,160           $11,160
Second             5,100             5,100 
Third              3,050             3,050
Subsequent         1,875             1,875


             Depreciation Limits for Trucks and Vans

Tax Year          Standard        50% Bonus

First             $3,460           $11,460
Second             5,600             5,600 
Third              3,350             3,350
Subsequent         1,975             1,975

Example: You purchased a new car in June 2015 $41,000. No matter how expensive the vehicle, your maximum depreciation in the first year (2015) is $11,160. (The deduction for a used car would be no more than $3,160 in the first year.) Your maximum depreciation in subsequent years is limited to the amounts indicated. The first-year limit also applies to any Sec. 179 expense option.

Depreciation Limits for Cars and Trucks 2014

Depreciation on cars and light trucks and vans is limited. There are two different limits--one for cars and one for trucks. In addition, for 2014 all new assets qualify for the 50% bonus depreciation. (Special tables, not reproduced here, apply to pure electric vehicles.)

           Depreciation Limits for Passenger Automobiles

Tax Year          Standard        50% Bonus

First             $3,160          $11,160
Second             5,100            5,100
Third              3,050            3,050
Subsequent         1,875            1,875


             Depreciation Limits for Trucks and Vans

Tax Year          Standard        50% Bonus

First             $3,460          $11,460
Second             5,500            5,500
Third              3,350            3,350
Subsequent         1,975            1,975

Example: You purchased a new car in June 2014 $41,000. No matter how expensive the vehicle, your maximum depreciation in the first year (2014) is $11,160. You would take $5,100 of depreciation in 2015; $3,050 in 2016; and $1,875 in 2017 and subsequent years until the car is fully depreciated (or disposed of). The first-year limit also applies to any Sec. 179 expense option.

 

Depreciation Limits for Cars and Trucks 1995-2013

The maximum depreciation for autos and trucks and vans for the fourth and subsequent years of ownership for the years 1995-2013 are:

                    Depreciation Limits Fourth and Subsequent Years
Year Placed in Service       Autos          Trucks and Vans

2013                       $1,875                $1,975
2012                        1,875                 1,875
2011                        1,775                 1,875
2010                        1,775                 1,875
2009                        1,775                 1,775
2008                        1,775                 1,875
2007                        1,775                 1,875
2006                        1,775                 1,875
2005                        1,675                 1,875
2004                        1,675                 1,875
2003                        1,775                 1,975
1995-2002                   1,775                 1,775

 

Annual Lease Value Tables

Use this table to find the annual lease value for imputing income on an employee's use of a vehicle. The fair market value is determined at the time the vehicle is first made available to the employee. The table applies to vehicles provided to an employee for a continuous period of 30 days or more. See below for shorter time periods.


Automobile Fair Market Value          Annual Lease Value

$ 1,000 to 1,999 $ 850 2,000 to 2,999 1,100 3,000 to 3,999 1,350 4,000 to 4,999 1,600 5,000 to 5,999 1,850 6,000 to 6,999 2,100 7,000 to 7,999 2,350 8,000 to 8,999 2,600 9,000 to 9,999 2,850 10,000 to 10,999 3,100 11,000 to 11,999 3,350 12,000 to 12,999 3,600 13,000 to 13,999 3,850 14,000 to 14,999 4,100 15,000 to 15,999 4,350 16,000 to 16,999 4,600 17,000 to 17,999 4,850 18,000 to 18,999 5,100 19,000 to 19,999 5,350 20,000 to 20,999 5,600 21,000 to 21,999 5,850 22,000 to 22,999 6,100 23,000 to 23,999 6,350 24,000 to 24,999 6,600 25,000 to 25,999 6,850 26,000 to 27,999 7,250 28,000 to 29,999 7,750 30,000 to 31,999 8,250 32,000 to 33,999 8,750 34,000 to 35,999 9,250 36,000 to 37,999 9,750 38,000 to 39,999 10,250 40,000 to 41,999 10,750 42,000 to 43,999 11,250 44,000 to 45,999 11,750 46,000 to 47,999 12,250 48,000 to 49,999 12,750 50,000 to 51,999 13,250 52,000 to 53,999 13,750 54,000 to 55,999 14,250 56,000 to 57,999 14,750 58,000 to 59,999 15,250

For vehicles with a fair market value in excess of $59,999, you can compute the annual lease value by multiplying the fair market value by 0.25 and adding $500 to the result.

Daily Lease Value

If you provide an automobile to an employee for a continuous period of less than 30 days, you must use the daily lease value to figure its value. You compute the daily lease value by multiplying the annual lease value by a fraction, using four times the number of days of availability as the numerator and 365 as the denominator. For example, 9 days for a $40,000 vehicle would be (9 x 4)/365 x $10,750 or $1,060.27.

You can apply a prorated annual lease value for a period of continuous availability of less than 30 days by treating the auto as if it had been available for 30 days. Use a prorated annual lease value if it would result in a lower valuation than applying the daily lease value to the shorter period of availability.

 

Inclusion Amounts for Autos First Leased in 2020

Notes--

Fair Market Value            Tax Year of Lease
  Over    Not Over      1st    2nd    3rd    4th    5th

 50,000    51,000         0      1      0      2      2
 51,000    52,000         2      6      9     10     13
 52.000    53,000         5     11     17     20     24
 53,000    54,000         7     17     24     30     35
 54,000    55,000        10     22     32     39     46
 55,000    56,000        12     27     41     48     57
 56,000    57,000        15     32     49     58     68
 57,000    58,000        17     38     56     68     79
 58,000    59,000        19     44     64     77     90
 59,000    60,000        22     49     72     87    100
 60,000    62,000        26     56     84    102    117
 62,000    64,000        30     68     99    121    139
 64,000    66,000        35     78    116    139    161
 66,000    68,000        40     89    131    159    183
 68,000    70,000        45     99    148    177    205
 70,000    72,000        50    110    163    197    227
 72,000    74,000        55    121    179    215    249
 74,000    76,000        60    131    195    235    271
 76,000    78,000        64    142    211    254    293
 78,000    80,000        69    153    227    272    315
 80,000    85,000        78    172    254    306    353
 85,000    90,000        90    198    295    353    408
 90,000    95,000       102    225    334    401    463
 95,000   100,000       114    252    373    449    518
100,000   110,000       133    292    433    520    600
110,000   120,000       157    343    513    615    710
120,000   130,000       181    399    592    710    820
130,000   140,000       206    452    671    805    931  
140,000   150,000       230    506    750    901  1,040


Example--On January 1, 2020 your business enters into a 3-year lease for an auto with a fair market value of $65,500. Your annual payments are $8,188. For 2020 the business can only deduct $8,153 ($8,188 less $35, from the table above). (For 2021, you can only deduct $8,110, $8,188 less $78.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. But you also reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2020, you could only deduct $5,5707 (($8,188 x 70%) - ($35 x 70%). Prorate amounts for vehicles first leased after January 1 of the year. For example, if the car is first leased on March 15, 2020, prorate the lease inclusion by 291/365. Note. Most tax preparation software will make the adjustment when you enter the lease inclusion amount for the year.

 

Inclusion Amounts for Autos First Leased in 2019

Notes--

Fair Market Value            Tax Year of Lease
  Over    Not Over      1st    2nd    3rd    4th    5th

 50,000    51,000         0      1      1      3      3
 51,000    52,000         4     11     15     20     23
 52.000    53,000         9     20     30     36     43
 53,000    54,000        13     30     44     53     63
 54,000    55,000        17     40     58     70     83
 55,000    56,000        22     49     72     88    102
 56,000    57,000        26     59     86    105    122
 57,000    58,000        31     68    101    122    142
 58,000    59,000        35     78    115    139    161
 59,000    60,000        39     88    129    156    181
 60,000    62,000        46    102    151    181    211
 62,000    64,000        55    121    179    216    250
 64,000    66,000        63    140    208    251    289
 66,000    68,000        72    130    236    284    329
 68,000    70,000        81    179    265    318    369
 70,000    72,000        90    198    293    353    408
 72,000    74,000        98    217    322    387    448
 74,000    76,000       107    236    351    421    487
 76,000    78,000       116    255    379    456    526
 78,000    80,000       125    275    407    489    567
 80,000    85,000       140    308    458    549    635
 85,000    90,000       162    356    529    635    734
 90,000    95,000       184    404    600    720    833
 95,000   100,000       206    452    671    806    931
100,000   110,000       238    525    778    934  1,079
110,000   120,000       282    621    920  1,105  1,277
120,000   130,000       326    717  1,063  1,276  1,474
130,000   140,000       370    812  1,206  1,447  1,672  
140,000   150,000       413    909  1,348  1,618  1,869


Example--On January 1, 2019 your business enters into a 3-year lease for an auto with a fair market value of $65,500. Your annual payments are $8,188. For 2019 the business can only deduct $8,125 ($8,188 less $63, from the table above). (For 2020, you can only deduct $8,048, $8,188 less $140.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. But you also reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2019, you could only deduct $5,688 (($8,188 x 70%) - ($63 x 70%). Prorate amounts for vehicles first leased after January 1 of the year. For example, if the car is first leased on March 15, 2019, prorate the lease inclusion by 291/365. Note. Most tax preparation software will make the adjustment when you enter the lease inclusion amount for the year.

 

Inclusion Amounts for Autos First Leased in 2018

Notes--

Fair Market Value            Tax Year of Lease
  Over    Not Over      1st    2nd    3rd    4th    5th

 50,000    51,000         1      3      5      5      6
 51,000    52,000         4      9     13     16     19
 52.000    53,000         7     15     22     27     31
 53,000    54,000        10     21     31     37     44
 54,000    55,000        12     27     40     48     56
 55,000    56,000        15     33     49     59     68
 56,000    57,000        18     39     58     69     81
 57,000    58,000        20     45     67     80     93
 58,000    59,000        23     51     76     91    105
 59,000    60,000        26     57     85    101    117
 60,000    62,000        30     66     98    118    135
 62,000    64,000        36     78    116    139    160
 64,000    66,000        41     90    134    160    185
 66,000    68,000        46    102    152    181    210
 68,000    70,000        52    114    169    203    235
 70,000    72,000        57    126    187    225    259
 72,000    74,000        63    138    205    246    284
 74,000    76,000        68    150    223    267    309
 76,000    78,000        74    162    241    288    333
 78,000    80,000        79    174    259    310    357
 80,000    85,000        89    195    290    347    401
 85,000    90,000       102    225    335    400    463
 90,000    95,000       116    255    379    454    525
 95,000   100,000       130    285    423    508    586
100,000   110,000       150    330    491    587    679
110,000   120,000       178    390    579    695    802
120,000   130,000       205    450    669    801    926
130,000   140,000       232    510    758    908  1.049  
140,000   150,000       260    570    847  1,015  1,172


Example--On January 1, 2018 your business enters into a 3-year lease for an auto with a fair market value of $65,500. Your annual payments are $8,188. For 2018 the business can only deduct $8,147 ($8,188 less $41, from the table above). (For 2019, you can only deduct $8,098, $8,188 less $90.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. But you also reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2018, you could only deduct $5,710 (($8,188 x 70%) - ($41 x 70%). Prorate amounts for vehicles first leased after January 1 of the year. For example, if the car is first leased on March 15, 2018, prorate the lease inclusion by 291/365. Note. Most tax preparation software will make the adjustment when you enter the lease inclusion amount for the year.

 

Inclusion Amounts for Autos First Leased in 2017

Notes--

Fair Market Value            Tax Year of Lease
  Over    Not Over      1st    2nd    3rd    4th    5th

 19,000    19,500         6     14     20     23     27
 19,500    20,000         7     16     23     27     31
 20,000    20,500         8     18     26     30     35
 20,500    21,000         9     20     28     35     39
 21,000    21,500        10     21     32     38     44
 21,500    22,000        11     23     35     42     47
 22,000    23,000        12     27     39     47     53
 23,000    24,000        14     31     45     54     62
 24,000    25,000        16     34     52     61     70
 25,000    26,000        18     38     58     68     78
 26,000    27,000        19     43     63     75     87
 27,000    28,000        21     47     69     82     95
 28,000    29,000        23     51     75     89    103
 29,000    30,000        25     55     80     97    112
 30,000    31,000        27     58     87    104    120
 31,000    32,000        29     62     93    111    128
 32,000    33,000        30     67     99    118    136
 33,000    34,000        32     71    104    126    144
 34,000    35,000        34     75    110    133    152
 35,000    36,000        36     79    116    140    160
 36,000    37,000        38     82    123    147    169
 37,000    38,000        40     86    129    154    177
 38,000    39,000        41     91    134    161    186
 39,000    40,000        43     95    140    168    194
 40,000    41,000        45     99    146    175    202
 41,000    42,000        47    103    152    182    210
 42,000    43,000        49    106    159    189    218
 43,000    44,000        50    111    164    197    226
 44,000    45,000        52    115    170    204    234
 45,000    46,000        54    119    176    211    243
 46,000    47,000        56    123    182    218    251
 47,000    48,000        58    127    187    225    260
 48,000    49,000        60    130    194    232    268
 49,000    50,000        61    135    200    239    276
 50,000    51,000        63    139    206    246    284
 51,000    52,000        65    143    211    254    292
 52,000    53,000        67    147    217    261    301
 53,000    54,000        69    151    223    268    309
 54,000    55,000        70    155    229    275    318
 55,000    56,000        72    159    235    282    326
 56,000    57,000        74    163    241    289    334
 57,000    58,000        76    167    247    296    342
 58,000    59,000        78    171    253    303    350
 59,000    60,000        80    174    260    310    359
 60,000    62,000        82    181    268    321    371
 62,000    64,000        86    189    280    335    387
 64,000    66,000        90    197    292    349    404
 66,000    68,000        93    205    304    364    420
 68,000    70,000        97    213    315    379    436 
 70,000    72,000       101    221    327    393    453
 72,000    74,000       104    229    339    407    470
 74,000    76,000       108    237    351    421    486 
 76,000    78,000       111    245    363    436    507
 78,000    80,000       115    253    375    450    518
 80,000    85,000       122    267    396    474    548
 85,000    90,000       131    287    425    511    588
 90,000    95,000       140    307    455    546    630
 95,000   100,000       149    327    484    581    671
100,000   110,000       162    357    530    635    733
110,000   120,000       181    397    589    706    815

Example--On January 1, 2017 your business enters into a 3-year lease for an auto with a fair market value of $51,500. Your annual payments are $7,188. For 2017 the business can only deduct $7,123 ($7,188 less $65, from the table above). (For 2018, you can only deduct $7,045, $7,188 less $143.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. But you also reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2017, you could only deduct $4,932 (($7,188 x 70%) - ($143 x 70%). Prorate amounts for vehicles first leased after January 1 of the year. For example, if the car is first leased on March 15, 2017, prorate the lease inclusion by 291/365. Note. Most tax preparation software will make the adjustment when you enter the lease inclusion amount for the year.

 

Inclusion Amounts for Trucks and Vans First Leased in 2017

Notes--



Fair Market Value            Tax Year of Lease
  Over    Not Over       1st   2nd    3rd    4th    5th

 
 19,500    20,000          4     8     11     13     16
 20,000    20,500          4    10     14     17     20
 20,500    21,000          5    12     17     21     23
 21,000    21,500          6    14     20     24     28
 21,500    22,000          7    16     23     28     32
 22,000    23,000          9    19     27     33     38
 23,000    24,000         10    23     34     40     46
 24,000    25,000         12    27     39     48     54
 25,000    26,000         14    31     45     55     62
 26,000    27,000         16    35     51     62     71
 27,000    28,000         18    39     57     69     79
 28,000    29,000         19    43     63     76     88
 29,000    30,000         21    47     69     83     96
 30,000    31,000         23    51     75     90    104
 31,000    32,000         25    55     81     97    112
 32,000    33,000         27    59     87    104    120
 33,000    34,000         29    63     93    111    129
 34,000    35,000         30    67     99    119    136
 35,000    36,000         32    71    105    126    145
 36,000    37,000         34    75    111    133    153
 37,000    38,000         36    79    117    140    161
 38,000    39,000         38    83    122    148    169 
 39,000    40,000         40    87    128    155    177
 40,000    41,000         41    91    135    161    186
 41,000    42,000         43    95    141    168    194
 42,000    43,000         45    99    146    176    203
 43,000    44,000         47   103    152    183    211
 44,000    45,000         49   107    158    190    219
 45,000    46,000         50   111    165    196    228
 46,000    47,000         52   115    170    204    236
 47,000    48,000         54   119    176    211    244
 48,000    49,000         56   123    182    218    252
 49,000    50,000         58   127    188    225    261
 50,000    51,000         60   131    194    232    269
 51,000    52,000         61   135    200    240    277
 52,000    53,000         63   139    206    247    285
 53,000    54,000         65   143    212    254    293
 54,000    55,000         67   147    218    264    301
 55,000    56,000         69   151    224    268    309
 56,000    57,000         70   155    230    275    318
 57,000    58,000         72   159    236    282    326
 58,000    59,000         74   163    242    289    335
 59,000    60,000         76   167    248    296    343
 60,000    62,000         79   173    256    308    355
 62,000    64,000         82   181    269    321    372
 64,000    66,000         86   189    280    336    388
 66,000    68,000         90   197    292    350    404
 68,000    70,000         93   205    304    365    420
 70,000    72,000         97   213    316    379    437 
 72,000    74,000        101   221    328    393    453
 74,000    76,000        104   229    340    407    470
 76,000    78,000        108   237    352    421    487
 78,000    80,000        111   245    364    436    503
 80,000    85,000        118   259    384    461    532
 85,000    90,000        127   279    414    497    573
 

 

Inclusion Amounts for Autos First Leased in 2016

Notes--

Fair Market Value            Tax Year of Lease
  Over    Not Over      1st    2nd    3rd    4th    5th

 19,000    19,500         6     13     20     23     27
 19,500    20,000         7     15     23     27     30
 20,000    20,500         8     17     26     30     35
 20,500    21,000         9     19     29     33     39
 21,000    21,500        10     21     31     38     42
 21,500    22,000        11     23     34     41     47
 22,000    23,000        12     26     39     46     53
 23,000    24,000        14     30     44     54     60
 24,000    25,000        16     34     50     60     69
 25,000    26,000        17     38     56     67     78
 26,000    27,000        19     42     62     74     85
 27,000    28,000        21     46     68     81     93
 28,000    29,000        23     50     73     89    101
 29,000    30,000        25     53     80     95    110
 30,000    31,000        26     58     85    102    118
 31,000    32,000        28     62     91    109    126
 32,000    33,000        30     65     98    116    134
 33,000    34,000        32     69    103    123    142
 34,000    35,000        34     73    109    130    150
 35,000    36,000        35     77    115    137    158
 36,000    37,000        37     81    121    144    166
 37,000    38,000        39     85    127    151    174
 38,000    39,000        41     89    132    158    183
 39,000    40,000        42     93    138    166    190
 40,000    41,000        44     97    144    172    199
 41,000    42,000        46    101    150    179    207
 42,000    43,000        48    105    155    187    215
 43,000    44,000        50    109    161    193    223
 44,000    45,000        51    113    167    201    231
 45,000    46,000        53    117    173    207    239
 46,000    47,000        55    121    179    214    247
 47,000    48,000        57    124    185    222    255
 48,000    49,000        59    128    191    228    264
 49,000    50,000        60    133    196    236    271
 50,000    51,000        62    136    203    242    280
 51,000    52,000        64    140    209    249    288
 52,000    53,000        66    144    214    257    295
 53,000    54,000        68    148    220    263    304
 54,000    55,000        69    152    226    271    312
 55,000    56,000        71    156    232    277    320
 56,000    57,000        73    160    238    284    328
 57,000    58,000        75    164    243    292    336
 58,000    59,000        77    168    249    298    345
 59,000    60,000        78    172    255    306    352
 60,000    62,000        81    178    264    316    364
 62,000    64,000        85    185    276    330    381
 64,000    66,000        88    194    287    344    397
 66,000    68,000        92    201    299    358    413
 68,000    70,000        95    209    311    372    430 
 70,000    72,000        99    217    322    387    445
 72,000    74,000       102    225    334    400    462
 74,000    76,000       106    233    346    414    478 
 76,000    78,000       110    241    357    428    494
 78,000    80,000       113    249    369    442    510
 80,000    85,000       120    262    390    467    538
 85,000    90,000       128    282    419    502    579
 90,000    95,000       137    302    448    537    620
 95,000   100,000       146    322    477    572    660
100,000   110,000       160    351    521    625    721
110,000   120,000       178    390    580    695    801

Example--On January 1, 2016 your business enters into a 3-year lease for an auto with a fair market value of $51,500. Your annual payments are $7,188. For 2016 the business can only deduct $7,124 ($7,188 less $64, from the table above). (For 2017, you can only deduct $7,048, $7,188 less $140.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. But you also reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2016, you could only deduct $4,934. Prorate amounts for vehicles first leased after January 1 of the year. Note. Most tax preparation software will make the adjustment when you enter the lease inclusion amount for the year.

 

Inclusion Amounts for Trucks and Vans First Leased in 2016

Notes--



Fair Market Value            Tax Year of Lease
  Over    Not Over       1st   2nd    3rd    4th    5th

 19,500    20,000          3     8     12     14     16
 20,000    20,500          4    10     15     17     20
 20,500    21,000          5    12     17     21     25
 21,000    21,500          6    14     20     25     28
 21,500    22,000          7    16     23     28     32
 22,000    23,000          8    19     28     33     38
 23,000    24,000         10    23     33     41     46
 24,000    25,000         12    26     40     47     55
 25,000    26,000         14    30     46     54     63
 26,000    27,000         16    34     51     62     70
 27,000    28,000         17    38     58     68     79
 28,000    29,000         19    42     63     76     86
 29,000    30,000         21    46     69     82     95
 30,000    31,000         23    50     75     89    103
 31,000    32,000         25    54     80     97    111
 32,000    33,000         26    58     86    104    119
 33,000    34,000         28    62     92    111    127
 34,000    35,000         30    66     98    117    136
 35,000    36,000         32    70    104    124    143
 36,000    37,000         34    73    110    132    151
 37,000    38,000         35    78    115    139    160
 38,000    39,000         37    82    121    146    167 
 39,000    40,000         39    85    128    152    176
 40,000    41,000         41    89    133    160    184
 41,000    42,000         42    94    139    166    192
 42,000    43,000         44    97    145    174    200
 43,000    44,000         46   101    151    181    208
 44,000    45,000         48   105    157    187    217
 45,000    46,000         50   109    162    195    224
 46,000    47,000         51   113    169    201    233
 47,000    48,000         53   117    174    209    240
 48,000    49,000         55   121    180    216    248
 49,000    50,000         57   125    186    222    257
 50,000    51,000         59   129    191    230    265
 51,000    52,000         60   133    197    237    273
 52,000    53,000         62   137    203    244    281
 53,000    54,000         64   141    209    250    290
 54,000    55,000         66   144    216    257    298
 55,000    56,000         68   148    221    265    305
 56,000    57,000         69   153    226    272    314
 57,000    58,000         71   156    233    279    321
 58,000    59,000         73   160    239    285    330
 59,000    60,000         75   164    244    293    338
 60,000    62,000         77   170    253    304    350
 62,000    64,000         81   178    265    317    366
 64,000    66,000         85   186    276    331    383
 66,000    68,000         88   194    288    345    399
 68,000    70,000         92   202    299    360    414
 70,000    72,000         95   210    311    374    431 
 72,000    74,000         99   217    324    387    447
 74,000    76,000        102   226    335    401    463
 76,000    78,000        106   233    347    415    480
 78,000    80,000        110   241    358    430    495
 80,000    85,000        116   255    379    454    524
 85,000    90,000        125   274    409    489    564
 

 


Copyright 2012-2021 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject.--ISSN 1089-1536


 

--Last update 02/21/20

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