With Chrysler set to close nearly 800 dealerships by June 9 and auto sales in a slump, many small business owners are tempted by fire-sale prices offered by dealers seeking to offload inventory. A number of tax provisions may help make a new car or truck more affordable. Some are deducted in figuring your taxable income, while others are credits against your tax bill.

If your business buys the vehicle, you may be able to take a chunk of the cost as a deduction against current income. Generally, when a business buys a depreciable asset it must write the cost off over the useful life, which for vehicles is five years. However, a larger portion of a vehicle’s cost may be eligible for immediate deduction under Section 179 of the tax code and bonus depreciation rules included in stimulus and job creation legislation.

If the vehicle is outfitted specifically for business – as a delivery vehicle or to carry tools, for example – and is not suitable as a passenger vehicle, the entire cost may qualify for the Section 179 deduction, up to $250,000 for tax year 2009. For passenger vehicles, the depreciation deduction (including a 50 percent first-year bonus enacted as part of 2008 and 2009 economic stimulus packages) is limited to $10,960 for cars and $11,060 for vans and trucks.

If the vehicle is used for business less than full-time, the deduction is determined by multiplying the limitation amount by the percentage the automobile is used for business.

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