IRS Issues Increased Passenger Auto Depreciation Limitations
The IRS recently released Rev. Proc. 2022-17, issuing higher new depreciation limitations for passenger automobiles.
The revenue procedure covers the Sec. 280F(a) inflation-adjusted dollar limitations on depreciation deductions for passenger automobiles, including trucks and vans, acquired after Sept. 27, 2017, and placed in service during 2022, for 2022 and each tax year thereafter.
For passenger automobiles for which the Sec. 168(k) first-year, or "bonus," depreciation is applied, the limitation is $19,200 for the first tax year, an increase of $1,000 over the 2021 amount of $18,200. If bonus depreciation does not apply, the 2022 first-year limitation is $11,200.
The succeeding-year limitations are $18,000 for the second year (up by $1,600 over 2021); $10,800 for the third year (up by $1,000); and $6,460 for each year after (up by $600).
In addition, the procedure includes a table of the inflation-updated amounts for a lease term beginning in calendar year 2022 by which a deduction for a leased passenger automobile must be reduced under Sec. 280F(c)(2).
The depreciation limits are updated annually for inflation in accordance with the automobile component of the chained consumer price index for urban consumers.