The IRS has issued new limitations on depreciation deductions for Passenger automobiles, including trucks and vans, placed in service in 2019 for business purposes.

Vehicle DepreciationMichael Colucci, PG&Co. Tax Manager, shares that for passenger automobiles placed into service during the 2019 calendar year and qualify for the additional first-year depreciation deduction (bonus depreciation), the depreciation limits are:

  • $18,100 for the 1st tax year
  • $16,100 for the 2nd year
  • $9,700 for the 3rd year
  • $5,760 for each succeeding year

For passenger automobiles that do not qualify for the additional depreciation deduction, the limits are:

  • $10,100 for the 1st tax year
  • $16,100 for the 2nd year
  • $9,700 for the 3rd year
  • $5,760 for each succeeding year

The IRS also shared the amounts of income inclusion for businesses who leased passenger automobiles in 2019. View Table 4 (page 7) of the Rev. Proc 2019-26 for income inclusion amounts for the cost of leasing automobiles first leased in 2019, as well as fair market values for each tax year after the vehicle is initially leased.

See Rev. Proc 2019-26 for complete IRS information. Please contact us with any questions at 401-831-0200.