Sport Utility Vehicles (SUV) with weight in excess of 6,000 pounds are not subject to the luxury auto depreciation limit rules and can utilize the Sec 179 expense deduction up to the annual inflation adjusted limit. This applies to sport utility vehicles rated at 14,000 pounds gross vehicle weight or less.

Tip - The gross vehicle weight rating can be found on the inside of the driver’s door to verify the gross vehicle weight rating.

These vehicles are limited to a Sec 179 deduction of $27,000 in 2022 (up from $26,200 in 2021). But the downside of Sec 179, besides the limit, is that a portion of the Sec 179 expense deduction will be recaptured and must be added back to income (SE income for self-employed individuals) if the vehicle is sold, taken out of service early or business use falls to 50% or less.

By definition, an SUV weighing more than 6,000 pounds is not subject to the luxury vehicle rules. Thus, bonus depreciation can be used– the entire business portion of the vehicle can be expensed by using 100% bonus depreciation in the first year. So, using bonus deprecation is a better option for SUVs, or any business vehicle for that matter.

However, 100% bonus depreciation is only available through 2022, after which the bonus rate is reduced by 20% per year and sunsets after 2026.