Depreciation 101: Vehicle Depreciation

Special limitations apply to depreciating vehicles that have a high potential for both business and personal use. This video goes into those limitations and how they're used to compute and report vehicle depreciation.

2024 UPDATE: Vehicle Depreciation Limits for 2024: 1st year - $20,400 (w/Special/Bonus Depreciation); $12,400 (w/o Special Depreciation); 2nd year - $19,800; 3rd year - $11,900; 4th and subsequent years - $7,160.

0:00 Introduction
0:35 What vehicles are subject to limitations?
1:29 MACRS and vehicle depreciation
2:23 How vehicle depreciation limits work
3:43 And example of vehicle depreciation
6:35 Reporting vehicle depreciation on form 4562
7:05 Conclusion

To learn more about MACRS, click here:    • Depreciation 101:  What is MACRS?  

To learn about the Standard Mileage Rate, and how to track vehicle mileage, click here:    • Deducting Vehicle Expenses: The Stand...  

Additional Resources and Information:

IRS Publication 946: "How to Depreciate Property": https://www.irs.gov/pub/irs-pdf/p946.pdf (You'll find all the MACRS depreciation and asset recovery period tables in this publication)

IRS Publication 463: "Travel, Entertainment, Gift, and Car Expenses": https://www.irs.gov/pub/irs-pdf/p463.pdf

IRS Form 4562: "Depreciation and Amortization": https://www.irs.gov/pub/irs-pdf/f4562...

Investopedia: "How to Log Mileage for Taxes in 8 Easy Steps": https://www.investopoedia.com/article...

Journal of Accountancy: "Auto Depreciation Limitations make a big leap for second year in a row": https://www.journalofaccountancy/news...

Image/Video Sources:

Storyblocks.com
Pexels.com
Wikimedia Commons (CC-SA 2.0-4.0)
Alison Chan
Kgbo
Celica21gtfour
Jason Lawrence
Raysonho
Jekander

The image of "James" was generated by thispersondoesnotexist.com and any resemblance between these images and any person, living or dead, is incidental and not intended.

Intro Music: "Bluesy Vibes" - Doug Maxwell - YouTube Audio Library

Outro Music: "Modern Attempt" - Track Tribe via YouTube Audio Library

DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or financial advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or financial professional.

The information in this video is current as of date of publication, and is subject to changes.