I suspect I'll be getting a tax break for depreciation but also my net income will be reduced due to the cash purchase. Is this the right way to go about it? It is my 1st time going through this and not an expert by any means so appreciate if you can guide me through the math and mechanics of this. Vehicle is a Tesla Model S.
On a related note, should I plan to depreciate the vehicle longer than 5 years based on the below?
The maximum depreciation allowances for passenger vehicles placed in service in 2018 are:
- $10,000 for the first year (or $18,000 if first-year bonus deprecation is claimed),
- $16,000 for the second year,
- $9,600 for the third year, and
- $5,760 for the fourth year and beyond until the vehicle is fully depreciated.
Thank you so much.
