Small Business Taxes & ManagementTM--Copyright 2023, 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.
2023 2022** 2022* 2021 2020 2019 2018 2017
Business mileage (cents per mile) 65.5 62.5 58.5 56.0 57.5 58 54.5 53.5
Charitable mileage 14 14 14 14 14 14 14 14
Medical mileage 22 22 18 16 17 20 18 17
Moving mileage 22 22 18 16 17 20 18 17
* Rates apply to travel from January 1, 2022 to June 30, 2022.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 12/31/2009, 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:
Credits for New Electric Vehicles Purchased in 2022 or Before .
Credits fors New Clean Vehicles Purchased in 2023 or After.
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 2023 $60,800 $60,800 2022 56,100 56,100 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 2023 $60,800 $60,800 2022 56,100 56,100 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 2023 28 cents per mile 2022 26 2021 26 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 14Example--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 2023
Depreciation on autos is limited. For vehicles first placed in service in 2023 there are two tables and the limit depends on when the auto was purchased and whether bonus depreciation applies. For depreciation purposes the term "passenger automobile" includes trucks and vans. See the examples below.
Depreciation Limits for Passenger Automobiles Acquired After September 27, 2017
and Placed in Service During Calendar Year 2023 for which Additional First Year Depreciation Applies
Tax Year Depreciation
First $20,200
Second 19,500
Third 11,700
Subsequent 6,960
Depreciation Limits for Passenger Automobiles Placed in Service
During Calendar Year 2023 for which Additional First Year Depreciation Does Not Apply
Tax Year Depreciation
First $12,200
Second 19,500
Third 11,700
Subsequent 6,960
Depreciation Limits for Cars 2022Depreciation on autos is limited. For vehicles first placed in service in 2022 there are two tables and the limit depends on when the auto was purchased and whether bonus depreciation applies. For depreciation purposes the term "passenger automobile" includes trucks and vans. See the examples below.
Depreciation Limits for Passenger Automobiles Acquired After September 27, 2017
and Placed in Service During Calendar Year 2022 for which Additional First Year Depreciation Applies
Tax Year Depreciation
First $19,200
Second 18,000
Third 10,800
Subsequent 6,480
Depreciation Limits for Passenger Automobiles Placed in Service
During Calendar Year 2022 for which Additional First Year Depreciation Does Not Apply
Tax Year Depreciation
First $11,200
Second 18,000
Third 10,800
Subsequent 6,460
Depreciation Limits for Cars 2021Depreciation on autos is limited. For vehicles first placed in service in 2021 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 2021 for which Additional First Year Depreciation Applies
Tax Year Depreciation
First $18,200
Second 16,400
Third 9,800
Subsequent 5,860
Depreciation Limits for Passenger Automobiles Placed in Service
During Calendar Year 2021 for which Additional First Year Depreciation Does Not Apply
Tax Year Depreciation
First $10,200
Second 16,400
Third 9,800
Subsequent 5,860
Depreciation Limits for Cars 2020Depreciation 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 2019Depreciation 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 1995-2016
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
2016 $1,875 $2,075
2015 1,875 1,975
2014 1,875 1,975
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
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 2023
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th 60,000 62,000 0 0 1 3 5 62,000 64,000 13 29 43 54 63 64,000 66,000 26 57 86 104 122 66,000 68,000 39 86 128 154 181 68,000 70,000 52 114 170 206 239 70,000 72,000 65 143 212 256 297 72,000 74,000 78 171 255 306 356 74,000 76,000 91 200 296 358 414 76,000 78,000 104 228 339 408 473 78,000 80,000 117 257 381 459 531 80,000 85,000 140 306 455 548 634 85,000 90,000 172 378 560 674 780 90,000 95,000 204 449 666 801 926 95,000 100,000 237 520 772 927 1073 100,000 110,000 286 627 930 1117 1292 110,000 120,000 350 769 1142 1371 1584 120,000 130,000 415 912 1353 1623 1877 130,000 140,000 480 1058 1564 1877 2169 140,000 150,000 545 1196 1776 2130 2462 150,000 160,000 610 1339 1986 2384 2754 160,000 170,000 675 1481 2198 2637 3046Example--On January 1, 2023 your business enters into a 3-year lease for an auto with a fair market value of $70,500. Your annual payments are $9,188. For 2023 the business can only deduct $9,123 ($9,188 less $65, from the table above). (For 2024, you can only deduct $9,045, $9,188 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 2023, you could only deduct $6,386 (($9,188 x 70%) - ($65 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, 2023, 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 2022
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th 56,000 57,000 1 1 1 2 2 57,000 58,000 2 4 5 5 7 58,000 59,000 3 7 9 11 13 59,000 60,000 4 9 14 16 19 60,000 62,000 6 13 20 23 28 62,000 64,000 9 19 27 34 38 64,000 66,000 11 24 36 43 50 66,000 68,000 14 30 43 53 61 68,000 70,000 16 35 52 63 72 70,000 72,000 19 40 61 72 83 72,000 74,000 21 46 68 82 95 74,000 76,000 24 51 77 91 106 76,000 78,000 26 57 85 101 117 78,000 80,000 29 62 93 111 128 80,000 85,000 33 72 107 128 148 85,000 90,000 39 86 127 152 176 90,000 95,000 45 100 147 177 204 95,000 100,000 52 113 167 201 233 100,000 110,000 61 133 198 238 274 110,000 120,000 73 161 239 286 330 120,000 130,000 86 188 279 335 387 130,000 140,000 98 216 319 384 443 140,000 150,000 111 243 360 432 499Example--On January 1, 2022 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 2022 the business can only deduct $8,177 ($8,188 less $11, from the table above). (For 2023, you can only deduct $8,156, $8,188 less $24.) 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 2022, you could only deduct $5,724 (($8,188 x 70%) - ($11 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, 2021, 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 2021
Notes--
Fair Market Value Tax Year of Lease Over Not Over 1st 2nd 3rd 4th 5th 51,000 52,000 0 0 1 0 1 52.000 53,000 1 1 1 2 2 53,000 54,000 1 2 2 3 4 54,000 55,000 1 3 3 5 5 55,000 56,000 2 3 5 6 6 56,000 57,000 2 4 6 6 8 57,000 58,000 2 5 7 9 10 58,000 59,000 3 5 8 10 11 59,000 60,000 3 6 9 11 13 60,000 62,000 3 7 11 13 15 62,000 64,000 4 9 13 15 18 64,000 66,000 5 10 15 18 21 66,000 68,000 5 12 17 21 24 68,000 70,000 6 13 20 23 27 70,000 72,000 7 14 22 26 30 72,000 74,000 7 16 24 29 33 74,000 76,000 8 18 26 31 36 76,000 78,000 9 19 28 34 39 78,000 80,000 9 21 30 37 42 80,000 85,000 11 23 34 41 48 85,000 90,000 12 27 40 47 55 90,000 95,000 14 30 45 55 62 95,000 100,000 16 34 50 61 70 100,000 110,000 18 40 58 71 81 110,000 120,000 21 47 70 83 97 120,000 130,000 25 54 81 96 112 130,000 140,000 28 62 91 110 127 140,000 150,000 31 69 103 123 141Example--On January 1, 2021 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 2021 the business can only deduct $8,183 ($8,188 less $5, from the table above). (For 2022, you can only deduct $8,178, $8,188 less $10.) 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 2021, you could only deduct $5,728 (($8,188 x 70%) - ($5 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, 2021, 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 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 1,040Example--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 1,869Example--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 1,172Example--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 815Example--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 801Example--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
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--Last update 06/16/23