Small Business Taxes & ManagementTM--Copyright 1998-2009, A/N Group, Inc.
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.
2009 2008 2007 2006 2005 2004 2003 2002
Business mileage (cents per mile) 55 50.5***48.5 44.5 40.5* 37.5 36.0 36.5
Charitable mileage 14 14 14 14** 14* 14 14 14
Medical mileage 24 19*** 20 18 15* 14 12 13
Moving mileage 24 19*** 20 18 15* 14 12 13
***From January 1 through June 30, 2008 the business rate is 50.5 cents/mile; from July 1 through December 31, 2008 the rate is 58.5 cents/mile. For medical and moving purposes the rate is 19 cents/mile for January 1 through June 30, 2008 and 27 cents/mile from July 1 through December 31, 2008.**For 2006 the Katrina-related charitable rate will be 32 cents/mile.
*From January 1, 2005 through August 31, 2005 the rate for business use is 40.5 cents/mile; for medical and moving the rate is 15 cents/mile. From September 1, 2005 through December 31, 2005 the rate for business mileage is 48.5 cents/mile; for medical and moving the rate is 22 cents/mile. For miles driven for charities providing Hurricane Katrina relief the rate is 29 cents/mile from Aug. 25 to Aug. 31, 2005; for September through December 2005 the Katrina-related rate is 34 cents/mile.
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.
Year Auto Max. Value Truck/Van Max. Value 2009 $15,000 $15,200 2008 15,000 15,900 2007 15,100 16,100 2006 15,000 16,400 2005 14,800 16,300 2004 14,800 2003 15,200 2002 15,300 2001 15,400 2000 15,400
Computing the Fair Market Value of Auto or Light Truck
What's the fair market value of a new car? . . . The question isn't 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 2008-2009 21 cents per mile 2007 19 2005-2006 17 2003-2004 16 2001-2003 15 2000 14 1994-1999 12 1992-1993 11.5 1989-1991 11 1988 10.5 1987 10 1986 9 1983-1985 8Example--You purchased a car in 2005 and use the car for business purposes 10,000 miles per year for business in 2005, 2006, 2007, and 2008. You sell the car in the beginning of 2009. You've got to reduce your cost basis by $7,400 (10,000 x 0.17 for years 2005 and 2006, 10,000 x 0.19 for 2007 and 0.21 x 10,000 for 2008). 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 and Trucks 2009
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 2009 all new assets qualify for the 50% additional depreciation. (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits for Passenger Automobiles
Tax Year Standard 50% Additional
First $2,960 $10,960
Second 4,800 4,800
Third 2,850 2,850
Subsequent 1,775 1,775
Depreciation Limits for Trucks and Vans
Tax Year Standard 50% Additional
First $3,060 $11,060
Second 4,900 4,900
Third 2,950 2,950
Subsequent 1,775 1,775
Example: You purchased a new car in June 2009. You take the full 50% additional depreciation. No matter how expensive the vehicle, your maximum depreciation in the first year (2009) is $10,960. You would take $4,800 of depreciation in 2010; $2,850 in 2011; and $1,775 in 2012 and subsequent years until the car is fully depreciated. Thus, a $31,000 car would take about 10 years to fully depreciate. Note. There are other rules that can further limit your depreciation. 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.
Depreciation Limits for Cars and Trucks 2008
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 2008 all new assets qualify for the 50% additional depreciation. (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits for Passenger Automobiles
Tax Year Standard 50% Additional
First $2,960 $10,960
Second 4,800 4,800
Third 2,850 2,850
Subsequent 1,775 1,775
Depreciation Limits for Trucks and Vans
Tax Year Standard 50% Additional
First $3,160 $11,160
Second 5,100 5,100
Third 3,050 3,050
Subsequent 1,875 1,875
Depreciation Limits for Cars and Trucks 2007Depreciation on cars and light trucks and vans is limited. For 2003 and later years, the IRS has created two different limits--one for cars and one for trucks. (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits
Passenger Automobiles Trucks and Vans
Tax Year
First $3,060 $3,260
Second 4,900 5,200
Third 2,850 3,050
Subsequent 1,775 1,875
Depreciation Limits for Cars and Trucks 2006Depreciation on cars and light trucks and vans is limited. For 2003 and later years, the IRS has created two different limits--one for cars and one for trucks. (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits
Passenger Automobiles Trucks and Vans
Tax Year
First $2,960 $3,260
Second 4,800 5,200
Third 2,850 3,150
Subsequent 1,775 1,875
Depreciation Limits for Cars and Trucks 2005Depreciation on cars and light trucks and vans is limited. For 2003 and later years, the IRS has created two different limits--one for cars and one for trucks. (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits
Passenger Automobiles Trucks and Vans
Tax Year
First $2,960 $3,260
Second 4,700 5,200
Third 2,850 3,150
Subsequent 1,675 1,875
Depreciation Limits for Cars and Trucks 2004Depreciation on cars and light trucks and vans is limited. For 2003 and later years, the IRS has created two different limits--one for cars and one for trucks. In addition, all new assets qualify for the 50% additional depreciation (you can elect to take the 30% additional depreciation or no additional depreciation). (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits for Passenger Automobiles
Tax Year Standard 50% Additional
First $2,960 $10,610
Second 4,800 4,800
Third 2,850 2,850
Subsequent 1,675 1,675
Depreciation Limits for Trucks and Vans
Tax Year Standard 50% Additional
First $3,260 $10,910
Second 5,300 5,300
Third 3,150 3,150
Subsequent 1,875 1,875
Depreciation Limits for Cars and Trucks 2003Depreciation on cars and light trucks and vans is limited. For 2003 and later years, the IRS has created two different limits--one for cars and one for trucks. In addition, all new assets qualify for either the 30% or 50% additional depreciation. (Special tables, not reproduced here, apply to pure electric vehicles.)
Depreciation Limits for Passenger Automobiles
Tax Year Standard 30% Additional 50% Additional
First $3,060 $7,660 $10,710
Second 4,900 4,900 4,900
Third 2,950 2,950 2,950
Subsequent 1,775 1,775 1,775
Depreciation Limits for Trucks and Vans
Tax Year Standard 30% Additional 50% Additional
First $3,360 $7,960 $11,010
Second 5,400 5,400 5,400
Third 3,250 3,250 3,250
Subsequent 1,975 1,975 1,975
Depreciation Limits for Cars and Trucks 1995--2002
Depreciation on cars and light trucks and vans is limited. Here's a listing of the maximum depreciation that can be taken on cars placed in service in the years listed.
2002 2001 2000 1999 1998 1997 1996 1995
First year $3,060* $3,060* $3,060 $3,060 $3,160 $3,160 $3,060 $3,060
Second year 4,900 4.900 4,900 5,000 5,000 5,000 4,900 4,900
Third year 2,950 2,950 2,950 2,950 2,950 3,050 2,950 2,950
Subsequent 1,775 1,775 1,775 1,775 1,775 1,775 1,775 1,775
*Note. For autos acquired after September 10, 2001 and before September 11, 2004, the limit indicated is increased by $4,600 for the first year only. Thus, for 2002, the first-year limit is $7,660 ($3,060 plus $4,600). Subsequent years are unchanged.
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 ValueFor 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 $500 to the result.$ 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
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 2009
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $18,500 $19,000 9 19 28 34 38 19,000 19,500 10 21 32 38 43 19,500 20,000 11 24 36 42 48 20,000 20,500 12 27 39 46 54 20,500 21,000 13 29 43 51 58 21,000 21,500 15 31 47 55 64 21,500 22,000 16 34 50 60 68 22,000 23,000 17 38 56 66 76 23,000 24,000 20 42 64 75 86 24,000 25,000 22 47 71 84 96 25,000 26,000 24 52 78 93 107 26,000 27,000 26 58 85 101 117 27,000 28,000 29 62 93 110 127 28,000 29,000 31 67 100 119 138 29,000 30,000 33 72 108 128 147 30,000 31,000 35 77 115 137 157 31,000 32,000 38 82 122 146 167 32,000 33,000 40 87 129 155 178 33,000 34,000 42 92 137 163 188 34,000 35,000 44 97 144 172 199 35,000 36,000 47 102 151 181 208 36,000 37,000 49 107 159 189 219 37,000 38,000 51 112 166 199 228 38,000 39,000 53 117 173 208 239 39,000 40,000 56 122 180 216 250 40,000 41,000 58 127 188 225 259 41,000 42,000 60 132 195 234 269 42,000 43,000 62 137 203 242 280 43,000 44,000 65 141 210 252 290 44,000 45,000 67 146 218 260 300 45,000 46,000 69 151 225 269 311 46,000 47,000 71 157 232 278 320 47,000 48,000 74 161 240 286 331 48,000 49,000 76 166 247 296 340 49,000 50,000 78 171 255 304 351 50,000 51,000 80 176 262 313 361 51,000 52,000 83 181 269 322 371 52,000 53,000 85 186 276 331 381 53,000 54,000 87 191 284 339 391 54,000 55,000 89 196 291 349 401 55,000 56,000 92 201 298 357 412 56,000 57,000 94 206 306 365 423 57,000 58,000 96 211 313 375 432 58,000 59,000 98 216 320 384 442 59,000 60,000 101 221 327 393 452 60,000 62,000 104 228 339 406 467 62,000 64,000 109 238 353 424 488 64,000 66,000 113 248 368 441 509 66,000 68,000 118 258 382 459 529 68,000 70,000 122 268 397 476 550 70,000 72,000 127 277 413 493 570 72,000 74,000 131 288 427 511 590 74,000 76,000 136 297 442 529 610 76,000 78,000 140 207 457 546 631 78,000 80,000 145 317 471 564 651 80,000 85,000 152 335 497 595 686 85,000 90,000 164 359 534 639 737 90,000 95,000 175 384 570 683 789 95,000 100,000 186 409 607 727 839 100,000 110,000 203 446 662 793 916 110,000 120,000 226 495 736 881 1,018Example--On January 1, 2009 your business enters into a lease for an auto with a fair market value of $51,500. Your annual payments are $7,188. For 2009 the business can only deduct $7,105 ($7,188 less $83). (For 2009, you can only deduct $7,007, $7,188 less $181.) 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 2009, you could only deduct $4,974 ($5,032 less $58; both amounts are multiplied by 0.7). Prorate amounts for vehicles first leased after January 1 of the year. Note. Most software programs will make the adjustment when you enter the lease inclusion amount for the year.
Inclusion Amounts for Trucks and Vans First Leased in 2009
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $18,500 19,000 8 17 25 30 35 19,000 19,500 9 19 29 35 40 19,500 20,000 10 22 33 38 45 20,000 20,500 11 25 36 43 50 20,500 21,000 12 27 40 48 55 21,000 21,500 13 30 43 52 60 21,500 22,000 15 32 47 56 66 22,000 23,000 16 36 52 64 72 23,000 24,000 18 41 60 72 83 24,000 25,000 21 45 68 81 93 25,000 26,000 23 50 75 90 103 26,000 27,000 25 56 82 98 114 27,000 28,000 27 61 89 107 124 28,000 29,000 30 65 97 116 134 29,000 30,000 32 70 104 125 144 30,000 31,000 34 75 112 134 154 31,000 32,000 36 80 119 143 164 32,000 33,000 39 85 126 151 175 33,000 34,000 41 90 134 160 184 34,000 35,000 43 95 141 169 195 35,000 36,000 45 100 148 178 205 36,000 37,000 48 105 155 187 215 37,000 38,000 50 110 163 195 226 38,000 39,000 52 115 170 204 236 39,000 40,000 55 120 177 213 246 40,000 41,000 57 125 185 221 256 41,000 42,000 59 130 192 231 266 42,000 43,000 61 135 199 240 276 43,000 44,000 64 139 207 249 286 44,000 45,000 66 144 215 257 296 45,000 46,000 68 149 222 266 307 46,000 47,000 70 155 229 274 317 47,000 48,000 73 159 237 283 327 48,000 49,000 75 164 244 292 338 49,000 50,000 77 169 251 301 348 50,000 51,000 79 174 259 310 357 51,000 52,000 82 179 266 318 368 52,000 53,000 84 184 273 328 378 53,000 54,000 86 189 281 336 388 54,000 55,000 88 194 288 345 399 55,000 56,000 91 199 295 354 408 56,000 57,000 93 204 302 363 419 57,000 58,000 95 209 310 371 429 58,000 59,000 97 214 317 381 439 59,000 60,000 100 219 324 389 450 60,000 62,000 103 226 336 402 465 62,000 64,000 107 236 351 420 485 64,000 66,000 112 246 365 438 505 66,000 68,000 116 256 380 455 526 68,000 70,000 121 266 394 473 546 70,000 72,000 125 276 409 491 566 72,000 74,000 130 286 423 509 586 74,000 76,000 134 296 438 526 607 76,000 78,000 139 305 454 543 627 78,000 80,000 143 316 467 561 648Inclusion Amounts for Autos First Leased in 2008
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $18,500 $19,000 20 42 62 73 84 19,000 19,500 22 47 71 83 94 19,500 20,000 25 53 78 93 106 20,000 20,500 27 58 87 102 117 20,500 21,000 30 63 95 112 128 21,000 21,500 32 69 103 122 139 21,500 22,000 34 75 111 131 151 22,000 23,000 38 83 123 146 167 23,000 24,000 43 94 139 165 190 24,000 25,000 48 105 155 185 212 25,000 26,000 53 115 172 204 235 26,000 27,000 58 126 188 223 257 27,000 28,000 63 137 204 243 279 28,000 29,000 68 148 220 262 302 29,000 30,000 73 159 236 282 324 30,000 31,000 78 170 252 301 347 31,000 32,000 83 181 268 321 368 32,000 33,000 88 192 284 340 391 33,000 34,000 93 202 301 359 414 34,000 35,000 98 213 317 379 436 35,000 36,000 103 224 333 398 459 36,000 37,000 108 235 349 418 481 37,000 38,000 113 246 365 437 503 38,000 39,000 118 257 381 457 525 39,000 40,000 123 268 397 476 548 40,000 41,000 128 279 413 495 571 41,000 42,000 133 289 430 515 593 42,000 43,000 137 301 446 534 615 43,000 44,000 142 312 462 553 638 44,000 45,000 147 323 478 573 659 45,000 46,000 152 333 495 592 682 46,000 47,000 157 344 511 611 705 47,000 48,000 162 355 527 631 727 48,000 49,000 167 366 543 650 750 49,000 50,000 172 377 559 670 772 50,000 51,000 177 388 575 689 794 51,000 52,000 182 399 591 709 816 52,000 53,000 187 410 607 728 839 53,000 54,000 192 420 624 747 862 54,000 55,000 197 431 640 767 884 55,000 56,000 202 442 657 785 906 56,000 57,000 207 453 673 805 928 57,000 58,000 212 464 689 824 951 58,000 59,000 217 475 705 844 973 59,000 60,000 222 486 721 863 996 60,000 62,000 229 502 746 892 1,029 62,000 64,000 239 524 778 931 1,074 64,000 66,000 249 546 810 970 1,118 66,000 68,000 259 567 843 1,008 1,164 68,000 70,000 269 589 875 1,047 1,209 70,000 72,000 279 611 907 1,086 1,253 72,000 74,000 289 633 939 1,125 1,298 74,000 76,000 299 654 972 1,164 1,342 76,000 78,000 309 676 1,004 1,203 1,387 78,000 80,000 319 698 1,036 1,242 1,432 80,000 85,000 336 736 1,093 1,309 1,511 85,000 90,000 361 791 1,173 1,406 1,623 90,000 95,000 386 845 1,255 1,503 1,734 95,000 100,000 410 900 1,335 1,600 1,846 100,000 110,000 448 981 1,457 1,745 2,014 110,000 120,000 497 1,090 1,619 1,939 2,238Example--On January 1, 2008 your business enters into a lease for an auto with a fair market value of $51,500. Your annual payments are $7,188. For 2008 the business can only deduct $7,006 ($7,188 less $182). (For 2009, you can only deduct $6,789, $7,188 less $399.) 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 2008, you could only deduct $4,905 ($5,032 less $127; both amounts are multiplied by 0.7). Prorate amounts for vehicles first leased after January 1 of the year.
Inclusion Amounts for Trucks and Vans First Leased in 2008
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $19,000 19,500 17 37 54 65 73 19,500 20,000 20 42 63 73 85 20,000 20,500 22 48 70 84 96 20,500 21,000 25 53 79 93 107 21,000 21,500 27 59 86 103 118 21,500 22,000 30 64 95 112 130 22,000 23,000 33 72 107 128 146 23,000 24,000 38 83 123 147 168 24,000 25,000 43 94 139 166 191 25,000 26,000 48 105 155 186 213 26,000 27,000 53 116 171 205 236 27,000 28,000 58 127 187 225 258 28,000 29,000 63 138 204 243 280 29,000 30,000 68 148 221 263 302 30,000 31,000 73 159 237 282 325 31,000 32,000 78 170 253 301 348 32,000 33,000 83 181 269 321 370 33,000 34,000 88 192 285 340 393 34,000 35,000 93 203 301 360 414 35,000 36,000 98 214 317 379 437 36,000 37,000 103 225 333 399 459 37,000 38,000 108 235 350 418 482 38,000 39,000 113 246 366 437 505 39,000 40,000 118 257 382 457 526 40,000 41,000 123 268 398 476 549 41,000 42,000 128 279 414 496 571 42,000 43,000 133 290 430 515 594 43,000 44,000 137 301 447 534 616 44,000 45,000 142 312 463 553 639 45,000 46,000 147 323 479 573 661 46,000 47,000 152 334 495 592 684 47,000 48,000 157 345 511 612 705 48,000 49,000 162 356 527 631 728 49,000 50,000 167 366 544 651 750 50,000 51,000 172 377 560 670 773 51,000 52,000 177 388 576 689 796 52,000 53,000 182 399 592 709 817 53,000 54,000 187 410 608 728 840 54,000 55,000 192 421 624 748 862 55,000 56,000 197 432 640 767 885 56,000 57,000 202 443 656 787 907 57,000 58,000 207 453 673 806 929 58,000 59,000 212 464 689 825 952 59,000 60,000 217 475 705 845 974 60,000 62,000 224 492 729 874 1,008 62,000 64,000 234 513 762 913 1,052 64,000 66,000 244 535 794 951 1,098 66,000 68,000 254 557 826 990 1,142 68,000 70,000 264 579 858 1,029 1,187 70,000 72,000 274 600 892 1,067 1,232 72,000 74,000 284 622 924 1,106 1,276 74,000 76,000 294 644 956 1,145 1,321 76,000 78,000 304 666 988 1,184 1,366 78,000 80,000 314 687 1,021 1,222 1,411Inclusion Amounts for Autos First Leased in 2007
Notes--
Fair Market Value Tax Year of Lease
Over Not Over 1st 2nd 3rd 4th 5th
$15,500 $15,800 2 5 11 11 13
15,800 16,100 4 10 17 19 22
16,100 16,400 6 14 24 28 31
16,400 16,700 9 18 31 35 41
16,700 17,000 11 23 37 43 50
17,000 17,500 13 29 46 54 62
17,500 18,000 17 37 56 68 77
18,000 18,500 20 44 68 81 93
18,500 19,000 24 51 80 94 108
19,000 19,500 27 59 90 108 124
19,500 20,000 30 67 101 121 139
20,000 20,500 34 74 113 134 154
20,500 21,000 37 82 123 148 170
21,000 21,500 41 89 135 161 185
21,500 22,000 44 97 146 174 201
22,000 23,000 49 108 163 194 224
23,000 24,000 56 123 185 221 255
24,000 25,000 63 138 207 248 285
25,000 26,000 70 153 229 275 316
26,000 27,000 77 168 251 302 347
27,000 28,000 83 183 274 328 378
28,000 29,000 90 198 296 355 409
29,000 30,000 97 213 318 382 439
30,000 31,000 104 228 341 408 470
31,000 32,000 111 243 363 435 501
32,000 33,000 118 258 385 461 532
33,000 34,000 125 273 407 488 563
34,000 35,000 131 288 430 515 593
35,000 36,000 138 303 452 542 624
36,000 37,000 145 318 474 568 656
37,000 38,000 152 333 496 595 686
38,000 39,000 159 348 519 621 717
39,000 40,000 166 363 541 648 748
40,000 41,000 172 378 564 674 779
41,000 42,000 179 393 586 701 810
42,000 43,000 186 408 608 728 840
43,000 44,000 193 423 630 755 871
44,000 45,000 200 438 652 782 902
45,000 46,000 207 453 674 809 933
46,000 47,000 213 468 697 835 964
47,000 48,000 220 483 719 862 995
48,000 49,000 227 498 742 888 1,025
49,000 50,000 234 513 746 915 1,056
50,000 51,000 241 528 786 942 1,087
51,000 52,000 248 543 808 969 1,117
52,000 53,000 254 558 831 995 1,148
53,000 54,000 261 573 853 1,022 1,179
54,000 55,000 268 588 875 1,049 1,210
55,000 56,000 275 603 897 1,076 1,241
56,000 57,000 282 618 920 1,102 1,271
57,000 58,000 289 633 942 1,128 1,303
58,000 59,000 296 648 964 1,155 1,334
59,000 60,000 302 663 987 1,182 1,364
60,000 62,000 313 685 1,020 1,222 1,411
62,000 64,000 326 716 1,064 1,276 1,472
64,000 66,000 340 746 1,108 1,329 1,534
66,000 68,000 354 775 1,154 1,382 1,595
68,000 70,000 367 806 1,198 1,435 1,657
70,000 72,000 381 836 1,242 1,489 1,719
72,000 74,000 395 865 1,287 1,543 1,780
74,000 76,000 408 896 1,331 1,596 1,842
76,000 78,000 422 926 1,376 1,649 1,903
78,000 80,000 436 955 1,421 1,703 1,965
80,000 85,000 460 1,008 1,498 1,796 2,074
85,000 90,000 494 1,083 1,610 1,929 2,228
90,000 95,000 528 1,158 1,721 2,063 2,382
95,000 100,000 562 1,233 1,833 2,196 2,536
100,000 110,000 614 1,346 1,999 2,396 2,767
110,000 120,000 682 1,496 2,222 2,663 3,075
Example--On January 1, 2007 your business enters into a lease for an auto with a fair market value of $51,500. Your annual payments are $7,188. For 2007 the business can only deduct $6,940 ($7,188 less $248). (For 2008, you can only deduct $6,645, $7,188 less $543.) 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 2007, you could only deduct $4,858 ($5,032 less $174; both amounts are multiplied by 0.7). Prorate amounts for vehicles first leased after January 1 of the year.
Inclusion Amounts for Trucks and Vans First Leased in 2007
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $16,400 $16,700 2 4 8 10 11 16,700 17,000 4 9 15 17 21 17,000 17,500 6 15 24 28 33 17,500 18,000 10 22 35 42 48 18,000 18,500 13 30 46 55 64 18,500 19,000 17 37 57 69 79 19,000 19,500 20 45 68 82 94 19,500 20,000 24 52 80 95 109 20,000 20,500 27 60 90 109 125 20,500 21,000 30 67 102 122 141 21,000 21,500 34 75 113 135 156 21,500 22,000 37 82 124 149 171 22,000 23,000 42 94 140 169 194 23,000 24,000 49 109 163 195 225 24,000 25,000 56 123 186 222 256 25,000 26,000 63 138 208 249 286 26,000 27,000 70 153 230 276 317 27,000 28,000 77 168 252 302 349 28,000 29,000 83 184 274 329 379 29,000 30,000 90 199 296 356 410 30,000 31,000 97 214 318 383 440 31,000 32,000 104 228 342 408 472 32,000 33,000 111 243 364 435 503 33,000 34,000 118 258 386 462 534 34,000 35,000 125 273 408 489 564 35,000 36,000 131 289 430 515 595 36,000 37,000 138 304 452 542 626 37,000 38,000 145 318 475 569 657 38,000 39,000 152 333 497 596 688 39,000 40,000 159 348 520 622 718 40,000 41,000 166 363 542 649 749 41,000 42,000 172 379 563 676 780 42,000 43,000 179 394 586 702 811 43,000 44,000 186 409 608 729 842 44,000 45,000 193 423 631 756 872 45,000 46,000 200 438 653 783 903 46,000 47,000 207 453 675 810 934 47,000 48,000 213 469 697 836 965 48,000 49,000 220 484 719 863 996 49,000 50,000 227 499 741 890 1,026 50,000 51,000 234 514 764 916 1,057 51,000 52,000 241 528 787 943 1,088 52,000 53,000 248 543 809 969 1,119 53,000 54,000 254 559 831 996 1,150 54,000 55,000 261 574 853 1,023 1,180 55,000 56,000 268 589 875 1,050 1,211 56,000 57,000 275 604 897 1,076 1,243 57,000 58,000 282 618 920 1,103 1,273 58,000 59,000 289 633 943 1,129 1,304 59,000 60,000 296 648 965 1,156 1,335 60,000 62,000 306 671 998 1,196 1,381 62,000 64,000 319 701 1,043 1,249 1,443 64,000 66,000 333 731 1,087 1,303 1,504 66,000 68,000 347 761 1,131 1,357 1,566 68,000 70,000 361 791 1,176 1,410 1,627 70,000 72,000 374 821 1,221 1,463 1,689 72,000 74,000 388 851 1,265 1,517 1,751 74,000 76,000 402 881 1,309 1,570 1,813 76,000 78,000 415 911 1,354 1,624 1,874 78,000 80,000 429 941 1,399 1,676 1,936Inclusion Amounts for Autos First Leased in 2006
Notes--
Fair Market Value Tax Year of Lease
Over Not Over 1st 2nd 3rd 4th 5th
$15,200 $15,500 4 6 10 10 10
15,500 15,800 6 10 16 18 18
15,800 16,100 8 15 22 25 28
16,100 16,400 9 19 29 33 36
16,400 16,700 11 24 35 40 45
16,700 17,000 13 28 42 48 53
17,000 17,500 16 34 50 58 66
17,500 18,000 19 41 61 71 80
18,000 18,500 23 48 71 84 95
18,500 19,000 26 55 82 96 110
19,000 19,500 29 62 93 109 125
19,500 20,000 32 70 103 122 139
20,000 20,500 36 76 114 135 154
20,500 21,000 39 84 124 148 168
21,000 21,500 42 91 135 160 184
21,500 22,000 45 98 146 173 198
22,000 23,000 50 109 162 192 220
23,000 24,000 57 123 183 218 250
24,000 25,000 63 138 204 243 279
25,000 26,000 70 152 225 269 309
26,000 27,000 76 166 247 294 339
27,000 28,000 83 181 268 319 368
28,000 29,000 90 195 289 345 397
29,000 30,000 96 209 311 371 426
30,000 31,000 103 223 332 397 455
31,000 32,000 109 238 353 422 485
32,000 33,000 116 252 374 448 515
33,000 34,000 122 267 395 473 545
34,000 35,000 129 281 417 498 574
35,000 36,000 135 295 439 523 604
36,000 37,000 142 309 460 549 633
37,000 38,000 148 324 481 575 662
38,000 39,000 155 338 502 601 691
39,000 40,000 161 353 523 626 721
40,000 41,000 168 367 545 651 750
41,000 42,000 175 381 566 677 780
42,000 43,000 181 396 587 702 810
43,000 44,000 188 410 608 728 839
44,000 45,000 194 424 630 753 869
45,000 46,000 201 438 651 779 898
46,000 47,000 207 453 672 805 927
47,000 48,000 214 467 694 830 956
48,000 49,000 220 482 715 855 986
49,000 50,000 227 496 736 881 1,016
50,000 51,000 233 510 758 906 1,045
51,000 52,000 240 525 778 932 1,075
52,000 53,000 246 539 800 958 1,104
53,000 54,000 253 553 821 984 1,133
54,000 55,000 259 568 842 1,009 1,163
55,000 56,000 266 582 864 1,034 1,192
56,000 57,000 273 596 885 1,060 1,221
57,000 58,000 279 611 906 1,085 1,251
58,000 59,000 286 625 927 1,111 1,281
59,000 60,000 292 639 949 1,136 1,311
60,000 62,000 302 661 981 1,174 1,354
62,000 64,000 315 690 1,023 1,225 1,413
64,000 66,000 328 718 1,066 1,276 1,473
66,000 68,000 341 747 1,108 1,328 1,531
68,000 70,000 354 776 1,151 1,378 1,590
70,000 72,000 367 804 1,194 1,429 1,649
72,000 74,000 380 833 1,236 1,481 1,707
74,000 76,000 393 862 1,278 1,532 1,767
76,000 78,000 407 890 1,321 1,583 1,825
78,000 80,000 420 919 1,363 1,634 1,884
80,000 85,000 443 969 1,438 1,723 1,987
85,000 90,000 475 1,041 1,544 1,851 2,135
90,000 95,000 508 1,112 1,651 1,978 2,282
95,000 100,000 541 1,184 1,757 2,106 2,429
100,000 110,000 590 1,291 1,917 2,297 2,650
110,000 120,000 655 1,435 2,130 2,552 2,944
Example--On January 1, 2006 your business enters into a lease for an auto with a fair market value of $50,500. Your annual payments are $7,188. For 2006 the business can only deduct $6,955 ($7,188 less $233). (For 2007, you can only deduct $6,678, $7,188 less $510.) 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 2006, you could only deduct $4,869 ($5,032 less $163; both amounts are multiplied by 0.7). Prorate amounts for vehicles first leased after January 1 of the year.
Inclusion Amounts for Trucks and Vans First Leased in 2006
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $16,700 $17,000 4 8 12 14 16 17,000 17,500 6 14 20 24 29 17,500 18,000 9 21 31 37 43 18,000 18,500 13 28 42 49 58 18,500 19,000 16 36 52 62 72 19,000 19,500 19 43 63 75 87 19,500 20,000 23 50 73 88 102 20,000 20,500 26 57 84 101 116 20,500 21,000 29 64 95 113 131 21,000 21,500 32 72 105 126 146 21,500 22,000 36 78 116 139 161 22,000 23,000 41 89 132 158 183 23,000 24,000 47 104 153 183 213 24,000 25,000 54 118 174 209 242 25,000 26,000 60 132 196 235 271 26,000 27,000 67 146 217 261 300 27,000 28,000 73 161 238 286 330 28,000 29,000 80 175 260 311 359 29,000 30,000 86 190 281 336 389 30,000 31,000 93 204 302 362 418 31,000 32,000 99 219 323 388 447 32,000 33,000 106 233 344 413 478 33,000 34,000 112 247 366 439 506 34,000 35,000 119 261 387 465 536 35,000 36,000 125 276 408 490 566 36,000 37,000 132 290 430 515 595 37,000 38,000 139 304 451 541 624 38,000 39,000 145 319 472 566 654 39,000 40,000 152 333 493 592 684 40,000 41,000 158 347 515 618 712 41,000 42,000 165 362 536 642 743 42,000 43,000 171 376 557 669 772 43,000 44,000 178 390 579 694 801 44,000 45,000 184 405 600 719 831 45,000 46,000 191 419 621 745 860 46,000 47,000 197 434 642 770 890 47,000 48,000 204 448 663 796 919 48,000 49,000 210 462 685 822 948 49,000 50,000 217 476 707 847 977 50,000 51,000 224 490 728 872 1,008 51,000 52,000 230 505 749 898 1,037 52,000 53,000 237 519 770 924 1,066 53,000 54,000 243 534 791 949 1,096 54,000 55,000 250 548 813 974 1,125 55,000 56,000 256 563 833 1,000 1,155 56,000 57,000 263 577 855 1,025 1,184 57,000 58,000 269 591 877 1,051 1,213 58,000 59,000 276 605 898 1,077 1,243 59,000 60,000 282 620 919 1,102 1,272 60,000 62,000 292 641 951 1,141 1,316 62,000 64,000 305 670 994 1,191 1,375 64,000 66,000 318 699 1,036 1,242 1,435 66,000 68,000 331 728 1,078 1,293 1,494 68,000 70,000 344 756 1,121 1,345 1,552 70,000 72,000 358 784 1,164 1,395 1,612 72,000 74,000 371 813 1,206 1,447 1,670 74,000 76,000 384 842 1,249 1,497 1,729 76,000 78,000 397 871 1,291 1,548 1,788 78,000 80,000 410 899 1,334 1,600 1,846Inclusion Amounts for Autos First Leased in 2005
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $15,200 15,500 3 6 9 11 13 15,500 15,800 4 9 13 17 19 15,800 16,100 5 12 18 22 26 16,100 16,400 7 15 22 27 32 16,400 16,700 8 18 27 32 39 16,700 17,000 9 21 32 38 44 17,000 17,500 11 25 38 45 52 17,500 18,000 14 30 45 54 63 18,000 18,500 16 35 52 63 73 18,500 19,000 18 40 60 72 83 19,000 19,500 20 46 67 80 94 19,500 20,000 23 50 75 90 104 20,000 20,500 25 55 82 99 115 20,500 21,000 27 61 89 108 125 21,000 21,500 30 65 97 117 135 21,500 22,000 32 70 105 125 146 22,000 23,000 35 78 116 139 161 23,000 24,000 40 88 131 156 182 24,000 25,000 44 98 146 175 202 25,000 26,000 49 108 161 192 223 26,000 27,000 54 118 175 211 244 27,000 28,000 58 128 191 228 265 28,000 29,000 63 138 205 247 285 29,000 30,000 67 149 220 264 306 30,000 31,000 72 159 234 283 326 31,000 32,000 77 168 250 300 348 32,000 33,000 81 179 265 318 367 33,000 34,000 86 189 279 336 389 34,000 35,000 90 199 295 354 409 35,000 36,000 95 209 309 372 430 36,000 37,000 99 219 325 389 451 37,000 38,000 104 229 339 408 471 38,000 39,000 109 239 354 426 491 39,000 40,000 113 249 370 443 512 40,000 41,000 118 259 384 462 533 41,000 42,000 122 269 400 479 554 42,000 43,000 127 279 414 497 575 43,000 44,000 132 289 429 515 595 44,000 45,000 136 299 444 533 616 45,000 46,000 141 309 459 551 636 46,000 47,000 145 320 473 569 657 47,000 48,000 150 329 489 587 678 48,000 49,000 154 340 504 604 699 49,000 50,000 159 350 518 623 719 50,000 51,000 164 360 533 640 740 51,000 52,000 168 370 548 659 760 52,000 53,000 173 380 563 676 781 53,000 54,000 177 390 578 694 802 54,000 55,000 182 400 593 712 823 55,000 56,000 186 410 609 729 844 56,000 57,000 191 420 623 748 864 57,000 58,000 196 430 638 766 884 58,000 59,000 200 440 653 784 905 59,000 60,000 205 450 668 802 925 60,000 62,000 212 465 691 828 957 62,000 64,000 221 485 721 864 998 64,000 66,000 230 506 750 900 1,039 66,000 68,000 239 526 780 935 1,081 68,000 70,000 248 546 810 971 1,123 70,000 72,000 258 566 839 1,008 1,163 72,000 74,000 267 586 869 1,044 1,204 74,000 76,000 276 606 899 1,079 1,247 76,000 78,000 285 626 930 1,114 1,288 78,000 80,000 294 646 960 1,150 1,329 80,000 85,000 310 682 1,011 1,213 1,402 85,000 90,000 333 732 1,086 1,303 1,504 90,000 95,000 356 782 1,161 1,392 1,608 95,000 100,000 379 832 1,236 1,481 1,712Example--On January 1, 2005 your business enters into a lease for an auto with a fair market value of $50,500. Your annual payments are $7,188. For 2005 the business can only deduct $7,024 ($7,188 less $164). (For 2006, you can only deduct $6,828, $7,188 less $360.) 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 2005, you could only deduct $4,917 ($5,032 less $115; both amounts are multiplied by 0.7). Prorate amounts for vehicles first leased after January 1 of the year.
Inclusion Amounts for Trucks and Vans First Leased in 2005
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $16,700 17,000 3 6 8 10 11 17,000 17,500 4 10 14 17 20 17,500 18,000 7 15 21 26 30 18,000 18,500 9 20 29 35 40 18,500 19,000 11 25 37 43 51 19,000 19,500 14 30 44 52 61 19,500 20,000 16 35 51 62 71 20,000 20,500 18 40 59 71 81 20,500 21,000 20 45 67 79 92 21,000 21,500 23 50 74 88 103 21,500 22,000 25 55 81 98 113 22,000 23,000 28 63 92 111 129 23,000 24,000 33 73 107 129 149 24,000 25,000 38 83 122 147 169 25,000 26,000 42 93 137 165 190 26,000 27,000 47 103 152 183 210 27,000 28,000 51 113 167 201 231 28,000 29,000 56 123 182 218 253 29,000 30,000 60 133 197 237 272 30,000 31,000 65 143 212 254 294 31,000 32,000 70 153 227 272 314 32,000 33,000 74 163 242 290 335 33,000 34,000 79 173 257 308 355 34,000 35,000 83 184 271 326 376 35,000 36,000 88 193 287 344 397 36,000 37,000 93 203 302 361 418 37,000 38,000 97 214 316 380 438 38,000 39,000 102 223 332 397 459 39,000 40,000 106 234 346 415 480 40,000 41,000 111 244 361 433 500 41,000 42,000 115 254 376 451 521 42,000 43,000 120 264 391 469 542 43,000 44,000 125 274 406 487 562 44,000 45,000 129 284 421 505 583 45,000 46,000 134 294 436 523 603 46,000 47,000 138 304 451 541 624 47,000 48,000 143 314 466 558 645 48,000 49,000 148 324 481 576 666 49,000 50,000 152 334 496 594 687 50,000 51,000 157 344 511 612 707 51,000 52,000 161 355 525 630 728 52,000 53,000 166 364 541 648 748 53,000 54,000 170 375 555 666 769 54,000 55,000 175 385 570 684 789 55,000 56,000 180 394 586 701 811 56,000 57,000 184 405 600 720 830 57,000 58,000 189 415 615 737 852 58,000 59,000 193 425 630 755 873 59,000 60,000 198 435 645 773 893 60,000 62,000 205 450 667 800 924 62,000 64,000 214 470 697 836 966 64,000 66,000 223 490 727 872 1,007 66,000 68,000 232 510 757 908 1,048 68,000 70,000 241 531 786 944 1,089 70,000 72,000 251 550 817 979 1,131 72,000 74,000 260 571 846 1,015 1,172 74,000 76,000 269 591 876 1,051 1,213 76,000 78,000 278 611 906 1,087 1,254 78,000 80,000 287 631 936 1,123 1,296Inclusion Amounts for Autos First Leased in 2004
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $17,500 18,000 11 23 33 42 48 18,000 18,500 13 26 40 49 56 18,500 19,000 14 31 46 55 65 19,000 19,500 16 35 51 63 73 19,500 20,000 18 39 57 70 81 20,000 20,500 20 43 63 77 89 20,500 21,000 22 47 69 84 97 21,000 21,500 23 51 75 91 106 21,500 22,000 25 55 81 98 114 22,000 23,000 28 61 90 109 126 23,000 24,000 32 69 102 123 142 24,000 25,000 35 77 114 137 159 25,000 26,000 39 85 126 151 176 26,000 27,000 43 93 137 166 192 27,000 28,000 46 101 149 180 209 28,000 29,000 50 109 161 194 225 29,000 30,000 54 116 174 208 242 30,000 31,000 57 125 185 223 257 31,000 32,000 61 133 197 237 274 32,000 33,000 64 141 209 251 291 33,000 34,000 68 149 221 265 307 34,000 35,000 72 157 232 280 323 35,000 36,000 75 165 224 294 340 36,000 37,000 79 173 256 308 357 37,000 38,000 83 181 268 322 373 38,000 39,000 86 189 280 337 389 39,000 40,000 90 197 292 351 405 40,000 41,000 94 204 304 365 423 41,000 42,000 97 213 316 379 438 42,000 43,000 101 221 327 394 455 43,000 44,000 105 228 340 408 471 44,000 45,000 108 237 351 422 488 45,000 46,000 112 245 363 436 504 46,000 47,000 115 253 375 451 520 47,000 48,000 119 261 387 464 538 48,000 49,000 123 269 398 479 554 49,000 50,000 126 277 411 493 570 50,000 51,000 130 285 422 508 586 51,000 52,000 134 292 435 522 603 52,000 53,000 137 301 446 536 619 53,000 54,000 141 309 458 550 636 54,000 55,000 145 316 471 564 652 55,000 56,000 148 325 482 578 669 56,000 57,000 152 333 493 593 685 57,000 58,000 155 341 506 607 701 58,000 59,000 159 349 517 622 718 59,000 60,000 163 357 529 636 734 60,000 62,000 168 369 547 657 759 62,000 64,000 176 384 571 686 792 64,000 66,000 183 401 594 714 825 66,000 68,000 190 417 618 743 857 68,000 70,000 197 433 642 771 890 70,000 72,000 205 448 666 800 923 72,000 74,000 212 465 689 828 956 74,000 76,000 219 481 713 856 990 76,000 78,000 227 496 738 884 1,022 78,000 80,000 234 513 760 914 1,055 80,000 85,000 247 540 803 963 1,112 85,000 90,000 265 580 862 1,035 1,194 90,000 95,000 283 621 921 1,105 1,277 95,000 100,000 301 661 980 1,177 1,359Example--On January 1, 2004 your business leases an auto with a fair market value of $30,500. Your annual payments are $5,748. For 2004 the business can only deduct $5,691 ($5,748 less $57). (For 2005, you can only deduct $5,623, $5,748 less $125.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. Reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2004, you could only deduct $3,984 ($4,024 less $40; both amounts are multiplied by 0.7).
Inclusion Amounts for Trucks and Vans First Leased in 2004
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th $18,000 18,500 7 15 21 26 30 18,500 19,000 9 18 28 33 38 19,000 19,500 11 22 34 40 47 19,500 20,000 13 26 39 48 55 20,000 20,500 14 31 45 54 63 20,500 21,000 16 35 51 61 72 21,000 21,500 18 38 58 68 80 21,500 22,000 20 42 63 76 88 22,000 23,000 23 48 72 87 100 23,000 24,000 26 58 83 101 117 24,000 25,000 30 64 96 115 133 25,000 26,000 34 72 108 129 149 26,000 27,000 37 81 119 143 165 27,000 28,000 41 88 132 157 183 28,000 29,000 44 97 143 172 198 29,000 30,000 48 104 155 187 215 30,000 31,000 52 112 167 201 231 31,000 32,000 55 121 178 215 248 32,000 33,000 59 128 191 229 264 33,000 34,000 63 136 203 243 281 34,000 35,000 66 145 214 257 298 35,000 36,000 70 152 227 271 314 36,000 37,000 74 160 238 286 330 37,000 38,000 77 169 249 301 346 38,000 39,000 81 176 262 314 364 39,000 40,000 84 185 273 329 379 40,000 41,000 88 192 286 343 396 41,000 42,000 92 200 298 357 412 42,000 43,000 95 209 309 371 429 43,000 44,000 99 216 322 385 445 44,000 45,000 103 224 333 400 462 45,000 46,000 106 233 345 413 479 46,000 47,000 110 240 357 428 495 47,000 48,000 114 248 369 442 511 48,000 49,000 117 257 380 457 527 49,000 50,000 121 264 393 471 544 50,000 51,000 125 272 404 486 560 51,000 52,000 128 280 417 499 577 52,000 53,000 132 288 428 514 593 53,000 54,000 135 297 440 527 610 54,000 55,000 139 304 452 542 626 55,000 56,000 143 312 464 556 643 56,000 57,000 146 321 475 571 659 57,000 58,000 150 328 488 585 675 58,000 59,000 154 336 499 600 691 59,000 60,000 157 345 511 613 708 60,000 62,000 163 356 529 635 733 62,000 64,000 170 372 553 663 766 64,000 66,000 177 389 576 692 798 66,000 68,000 185 404 600 720 832 68,000 70,000 192 420 624 749 864 70,000 72,000 199 436 648 777 897 72,000 74,000 206 453 671 805 931 74,000 76,000 214 468 695 834 963 76,000 78,000 221 484 719 863 996 78,000 80,000 228 501 742 891 1,029Vehicles Qualifying for New Energy Tax Credit and Alternative Energy Credit
The Energy Policy Act of 2005 provides a credit for gas-hybrid cars based on their fuel efficiency and emissions. The credit applies to vehicles purchased on or after January 1, 2006 and may be as much as $3,400 for the most fuel-efficient vehicles. Taxpayers seeking the credit may want to buy early since the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
In addition, certain vehicles will qualify for the alternative energy credit. These are vehicles that can only be operated on an alternative fuel such as compressed natural gas.
Notes.
Lean-Burn Technology Vehicles Qualifying for Tax Credit
Before, only hybrid vehicles, fuel cell vehicles and alternative fuel vehicles had been certified, but now certain advanced lean-burn technology vehicles, which generally run on diesel fuel have been certified. These vehicles are passenger cars or light trucks with an internal combustion engine designed to operate primarily using more air than is necessary for complete combustion of the fuel. The vehicles also must incorporate direct fuel injection technology and achieve at least 125 percent of the 2002 model year city fuel economy rating. For a taxpayer to claim the credit, the original use of the vehicle must begin with the taxpayer and the vehicle must be acquired for use or lease by the taxpayer and not for resale.
Caution. This credit is subject to a phase-out which begins when a manufacturer sells 60,000 qualified hybrid and advanced lean-burn technology vehicles.
Phase-Out of Credit for New Qualified Hybrid and Advanced Lean Burn Technology Motor Vehicles
Both the new advanced lean burn technology motor vehicle credit and the new qualified hybrid motor vehicle credit begin to phase out for a manufacturer's passenger automobiles and light trucks in the second calendar quarter after the calendar quarter in which at least 60,000 of the manufacturer's passenger automobiles and light trucks that qualify for either credit have been sold for use or lease in the United States. Taxpayers purchasing the manufacturer's vehicles during the first two calendar quarters of the phase-out period may claim only 50 percent of the otherwise allowable credit. Taxpayers purchasing the manufacturer's vehicles during the third and fourth quarters of the phase-out period may claim only 25 percent of the otherwise allowable credit. No credit is available for vehicles purchased after the last day of the fourth quarter of the phase-out period.
Vehicles Subject to Phaseout and Applicable Credit--April 1, 2009
Vehicle Credit
Apr. 1, 2009-Sept. 30, 2009 Oct. 1, 2009-Mar. 31, 2010 After Mar. 31, 2010
2005 Ford Escape 2WD $1,300 $650 $0
2005 Ford Escape 4WD $ 975 $487.50 $0
2006 Ford Escape 2WD $1,300 $650 $0
2006 Ford Escape 4WD $ 975 $487.50 $0
2006 Mercury Mariner 4WD $ 975 $487.50 $0
2007 Ford Escape 2WD $1,300 $650 $0
2007 Ford Escape 4WD $ 975 $487.50 $0
2007 Mercury Mariner 4WD $ 975 $487.50 $0
2008 Ford Escape 2WD $1,500 $750 $0
2008 Ford Escape 4WD $1,100 $550 $0
2008 Mercury Mariner 2WD $1,500 $750 $0
2008 Mercury Mariner 4WD $1,100 $550 $0
2009 Ford Escape 2WD $1,500 $750 $0
2009 Ford Escape 4WD $ 975 $487.50 $0
2009 Mercury Mariner 2WD $1,500 $750 $0
2009 Mercury Mariner 4WD $ 975 $487.50 $0
2010 Ford Fusion $1,700 $850 $0
2010 Mercury Milan $1,700 $850 $0
Vehicles Subject to Phaseout and Applicable Credit--January 1, 2008
Vehicle Credit
Jan. 1, 2008-June 30, 2008 July 1, 2008-Dec. 31, 2008 After Dec. 31, 2008
2005 Accord Hybrid AT $325 $162.50 $0
2005 Accord Hybrid Navi At $325 $162.50 $0
2005 Civic Hybrid MT $850 $425 $0
2005 Civic Hybrid CVT $850 $425 $0
2005 Insight CVT $725 $362.50 $0
2006 Accord Hybrid Navi (calibration) $650 $325 $0
2006 Accord Hybrid Navi (calibration) $650 $325 $0
2006 Accord Hybrid AT (w/o calibtn) $325 $162.50 $0
2006 Accord Hybrid Navi (w/o calibtn) $325 $162.50 $0
2006 Civic Hybrid CVT $1,050 $525 $0
2006 Insight CVT $725 $362.50 $0
2007 Accord Hybrid AT $650 $325 $0
2007 Accord Hybrid Navi AT $650 $325 $0
2007 Civic Hybrid CVT $1,050 $525 $0
2008 Civic Hybrid CVT $1,050 $525 $0
Vehicles Subject to Phaseout and Applicable Credit--October 1, 2006
Vehicle Credit
Oct. 1, 2006-March 31, 2007 April 1, 2007-Sept. 30, 2007 After Sept. 30, 2007
2007 Lexus RX 400h 2WD and 4WD $1,100 $550 $0
2007 Highlander 2WD and 4WD $1,300 $650 $0
2007 Prius $1,575 $787.50 $0
2005 Prius $1,575 $787.50 $0
2006 Prius $1,575 $787.50 $0
2006 Highlander 4WD Hybrid $1,300 $650 $0
2006 Highlander 2WD Hybrid $1,300 $650 $0
2006 Lexus RX400h 2WD $1,100 $550 $0
2006 Lexus RX400h 4WD $1,100 $550 $0
2007 Camry Hybrid $1,300 $650 $0
2007 Lexus GS 450h $775 $387.50 $0
Vehicles Qualifying for Clean Fuel Vehicle DeductionThe original purchaser of a qualifying hybrid gas-electric car may deduct $2,000 for the year the vehicle is first used, if that year is before 2006. Beginning in 2006 the deduction is replaced by a credit which varies depending on the fuel economy, weight and other factors. These vehicles qualify for the clean-fuel vehicle deduction for 2005:
Copyright 1998-2009 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 09/17/09