Businesses can save lots on taxes with first-year 100% bonus depreciation. Firms can deduct the full cost of new and used qualifying business assets, with lives of 20 years or less, that they buy and place in service during the year. The cost of a qualified film, television or live theatrical production is eligible, too. Purchase and place assets in service this year if you want the full tax break. Bonus depreciation isn’t as valuable after 2022. Unless Congress acts, the 100% write-off phases out 20% for each year after 2022, before expiring in 2027.

There are lots of breaks for buyers of business vehicles under the tax laws. The annual depreciation caps for passenger autos rise sharply in 2022. If bonus depreciation is claimed, the first-year ceiling is $19,200 for new and used cars first put in service this year. The second- and third-year caps are $18,000 and $10,800. After that…$6,460. If no bonus depreciation is taken, the first-year cap is $11,200. Buyers of heavy SUVs used solely for business can write off the full cost, thanks to bonus depreciation. SUVs must have a gross weight rating over 6,000 pounds. Also, up to 100% of the cost of a big pickup truck can be expensed. When expensing business assets, the amount expensed can’t exceed taxable income from the taxpayer’s business. Bonus depreciation does not have this limit.

Leasing a vehicle to use in your business is more expensive tax-wise in 2022. If a car that is worth more than $56,000 is first leased for business during the year, the lessee must pay income tax each year on an amount spelled out in IRS tables. For example, on a three-year lease for a $75,000 car with a lease term starting in 2022, the income inclusion is $24 in 2022, $51 in 2023 and $77 in 2024 (Rev. Proc. 2022-17). Note that you don’t add the amounts to your income when filling out your tax return. Instead, you reduce the size of your deduction for the lease payments on the vehicle.