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Dear Client:
If you own a vehicle in NYC, you need to know about some recent tax changes that will affect your Manhattan income taxes. The IRS has issued the depreciation deduction limitations and lease inclusion amounts for auto mobiles, trucks and vans first purchased and used in 2010. Additionally, the IRS released the annual income inclusion amounts for vehicles first leased in 2010. The basic 2010 depreciation limits for passenger automobiles, trucks and vans are higher than the respective depreciation limits for 2009.
Passenger automobiles. The maximum depreciation limits for passenger automobiles first placed in service during the 2010 calendar year are:
• – $3,060 for the first tax year;
• – $4,900 for the second tax year;
• – $2,950 for the third tax year; and
• – $1,775 for each tax year thereafter.
Trucks and vans. The maximum depreciation limits for trucks and vans first placed in service during the 2010 calendar year are:
• – $3,160 for the first tax year;
• – $5,100 for the second tax year;
• – $3,050 for the third tax year; and
• – $1,875 for each tax year thereafter.
Leases. Lease payments for vehicles used for business or investment purposes are deductible in proportion to the vehicle’s business use. However, lessees must include a certain amount in income during the year the vehicle is leased to partially offset the amounts by which the lease payments exceed the luxury auto limits. The IRS has released tables that identify the income inclusion amounts for passenger automobiles, trucks and vans with lease terms beginning in 2010. These amounts can be found on the IRS’s website, www.irs.gov , and in Revenue Procedure 2010-18.
Please call our office of small business CPAs in manhattan at your earliest opportunity if you have questions about the 2010 vehicle depreciation dollar limits or other business vehicle expenses and how they may potentially affect your New York income taxes or Manhattan based S-corp, LLC or other type of NYC small business.
About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation. We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.
Jonathan Medows, CPA
MEDOWS CPA, PLLC
A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses