Bonus depreciation

[nvrstaxservices]

Can you claim bonus depreciation on 12/31/2022. And include the taxes and interest you are going to pay for a business van. And also claim mileage for that 1 day. And then in 2023 use the mileage for that vehicle?

[AmeliesUncle]

Yes, if the vehicle was first "placed in service" in 2022 and it was over 50% business use, you have the option to claim Bonus Depreciation on the business percentage of the vehicle.

Bonus Depreciation is part of using the "Actual Expenses" for your vehicle.  The amount for depreciation includes your cost, sales tax and required purchase fees.

Because you use Actual Expenses in the first year you use the vehicle for business (you are required to use the method now because your tax return is late), you can never use the Standard Mileage Rate for that vehicle.  You can only continue to use Actual Expenses.  

If your business percentage of the vehicle drops to 50% or less in any of the following several years, you will need to "recapture" the Bonus Depreciation and other accelerated depreciation.  The basically means you pay back the depreciation so you will owe more tax in that year that the business percentage dropped to 50% or less.

You deduct the business portion of the vehicle loan interest on the year that you actually pay the interest.