Small Business Tax Advantage

A new Mercedes-Benz from Sears Imported Autos is a great addition to any business. Not only is it an exclusive vehicle that would make any small business owner proud, but it is also immensely capable and rewarding to drive. And with its tax deduction advantages, it can also be rewarding to your bottom line.*

Since most M-Class, GL-Class and G-Class models have a Gross Vehicle Weight Rating (GVWR)** of over 6,000 pounds, they qualify for an accelerated tax depreciation schedule. When used for business, these vehicles can be depreciated at a faster rate than luxury cars.

Previously, the 2010 Small Business Act extended a 50% first-year bonus depreciation through December 31, 2010. Currently, as a result of "The Act", business owners may now deduct up to 100% of the vehicle when the vehicle is purchased for business use. The IRS categorizes SUV's with a gross vehicle weight in excess of 6,000 lbs differently than other luxury automobiles.

As a result:

Business owners that purchase a qualifying vehicle may be eligible for a 100% Write-Off of the Purchase Price if the vehicle was acquired September 9, 2010 through December 31, 2011. Here’s an example of what has changed….

Previously before “The Act”: Vehicle Purchase Price: $60,000 with 100% Business Use

• Immediate tax depreciation write-off @ $25,000

• Additional 50% bonus depreciation deduction (($60,000 - $25,000) X 50%) @ $17,500

• 1st year Depreciation Write-Off (($60,000 - $25,000 - $17,500) X 20%) @ $3,500.

• Potential total year depreciation of $25,000 + $17,500 + $3,500 = $46,000

Currently under “The Act”: Vehicle Purchase Price: $60,000 with 100% Business Use

• A 100% bonus depreciation deduction (($60,000 x 100%) = $60,000
That’s a really substantial savings. To qualify, the vehicle must be purchased (not leased) and must be used at least 50% for business purposes. To learn more about how a new Mercedes-Benz maybe advantageous to your business, please stop by Sears Imported Autos or contact us at 952-546-5301.
*Individual tax situations may vary. The above information was accurate at the time of publishing. Federal rules and tax guidelines are subject to change. Consult your tax advisor for complete details on rules applicable to your transaction.
**Gross Vehicle Weight Rating (GVWR) is the manufacturer's rating of the vehicle's maximum weight when fully loaded with people and cargo