X5, X6 & x7 TAX BENEFIT FOR 2022.

The newly enacted Tax Cuts and Jobs Act has provided you with some new tax-based resources that could prove to be very helpful in 2022 and beyond. Outlined below is a summary of what is currently available.

X5, X6 & X7 Depreciation.
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 pounds differently than other luxury automobiles. As a result:

• 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.

Here's an example of how the math plays out...

X5, X6, or X7 Purchase Price: $70,000 with 100% Business Use.
A 100% bonus depreciation deduction ($70,000 x 100%) = $70,000.

This presents a substantial tax savings for business owners. To qualify, the X5, X6 or X7 must be purchased (not leased) and must be used 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 tax year 2022 (i.e., bonus depreciation percentage is lowered to 80% for 2023, 60% for 2024, 40% for 2025, and 20% for 2026).

**Autoplex BMW is not an accountant nor does it pretend to be.**  We are in the business of providing vehicle advice, not tax advice. Customers with questions regarding this topic should consult their individual tax adviser to determine their eligibility for this deduction.