Should you trade in your old vehicle used for business for a new one?
Welcome to the Worth Tax Brief — where taxes don’t have to feel scary, boring, or overwhelming. My goal is to make them clear, practical, and even a little interesting. Whether you’re a small business owner, a real estate investor, or simply trying to make sense of your tax bill, you’re in the right place.
On the horizon is one of the biggest tax changes yet: the “Big, Beautiful Bill” (BBB) — a massive piece of legislation that could reshape how we file, plan, and pay. These laws often run hundreds of pages, filled with dense legal language. My job? To cut through the noise and find strategies that keep more money in your pocket.
Here’s what you can expect from this blog:
- Clear, straightforward breakdowns of new tax rules (like the BBB).
- Actionable strategies you can start using right away.
- No fluff, no jargon — just practical insights that translate IRS-speak into real-world solutions.
Final Quarter Tax Strategies for 2025: Spotlight on Small Business Owners
1. Should you trade in your old vehicle used for business for a new one?
Trading your old vehicle used for business for a new one allows you to take advantage of the permanent 100% bonus depreciation.
Bonus depreciation is a tax incentive that allows businesses to immediately deduct a large percentage of the purchase price of eligible assets, rather than writing them off over many years. This accelerated deduction reduces a company's taxable income and tax liability in the first year the asset is placed in service.
Example:
LLC owner trades in his old and fully depreciated vehicle for a new one at $40,000.
- The business can depreciate 100% of the cost of the new vehicle used for business if the vehicle weight is over 14,000 lbs.
- The business can depreciate $31,300 of the cost of the new vehicle used for business if the vehicle weight is between 6,000 and 14,000 lbs.
- The business can depreciate $20,000 of the cost of the new vehicle used for business
if the vehicle weight is under 6,000 lbs.
2. Unlock added benefits with S-Corp status.
The permanent 100% depreciation is a powerful strategy tool for small businesses.
3. What is the timing?
You have till the end of the year to trade in your old vehicle used for business.
Stay tuned for more insights in the Worth Tax Brief. For personalized guidance, call Worth Tax Advisors.