BMW Luxury Vehicle Tax Advantage Savings - Sewickley BMW
TAX ADVANTAGES

BMW of Cincinnati North located in Cincinnati, Ohio is offering tax benefits on the BMW X5, X6 SAV and X7s to customers located in surrounding cities in the area. The X5 and X6 lead the segment with a wide array of features and benefits. A benefit that everyone may not be aware of is a very significant tax deduction that is available when the vehicle is purchased for business use. As a result of the Act, business owners may now deduct up to 100% of the vehicle purchase price when the vehicle is purchased for business use, as The IRS categorizes SUVs with a gross vehicle weight in excess of 6,000 lbs differently than other luxury automobiles. As a result of the Newly enacted Tax Cuts and Jobs Act:
  • Business owners that purchase an X5, X6 or X7 in tax years 2018 through 2022 may be eligible for a 100% write-off of the purchase price
    Example:X5, X6 or X7 Purchase Price:  $60,000 with 100% Business Use
  •     A 100% bonus depreciation deduction ($60,000 x 100%) = $60,000

This presents a substantial tax saving for business owners. To qualify, the X5, X6 or X7 must be purchased (not leased) and must be used for at least 50% for business purposes. This deduction applies to both new and used vehicles acquired by purchase, so long as the acquiring taxpayer had not previously used the acquired vehicle, and did not acquire the vehicle from a related party. Please note that the bonus depreciation percentage phases down by 20% per year after the tax year 2022 (i.e., bonus depreciation percentage is lowered to 80% for 2023, 60% for 2024, 40% for 2025, and 20% for 2026).  



TAX DEPRECIATION COMPARISON

Listed below are three comparisons that illustrate the tax depreciation advantages for business owners who purchase a new BMW X5, X6, or X7 before January 1, 2023. Please consult with your tax professional in order to determine how this information can be applied to your individual business situation.
 BMW X5 BMW X6 BMW X7
 
    
 $66,750 BMW X5 vs $66,750 Luxury Car
Total allowable depreciation for 1st year of ownership*
 $78,300 BMW X6 vs $78,300 Luxury Car
Total allowable depreciation for 1st year of ownership*
 $92,600 BMW X7 vs $92,600 Luxury Car
Total allowable depreciation for 1st year of ownership*
   
 
In this situation, your business could deduct 100% of the X6 cost (a $78,300 Tax Deduction for Your Business), but your business can't even deduct the normal 27% 1st-year deduction on the luxury sedan because that amount is CAPPED at $19,200. So instead of $21,100 as a 1st-year depreciation deduction, you can only claim a maximum of $19,200.In this situation, your business could deduct 100% of the X7 cost (a $92,600 Tax Deduction for Your Business), but your business can't even deduct the normal 27% 1st-year deduction on the luxury sedan because that amount is CAPPED at $19,200. So instead of $25,000 as a 1st-year depreciation deduction, you can only claim a maximum of $19,200.
 





For complete details please refer to this link: 
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
Disclaimer: To qualify, the X5, X6 or X7 must be purchased (not leased) and must be used for at least 50% for business purposes. This deduction applies to both new and used vehicles acquired by purchase, so long as the acquiring taxpayer had not previously used the acquired vehicle, and did not acquire the vehicle from a related party. BMW of Cincinnati North is not an accountant nor provides tax advice. Customers with questions regarding this topic should consult their individual tax adviser to determine their eligibility for this deduction. Offer available on select BMW X5 & X6 SAV Models, see BMW of Cincinnati North for complete details.