BMW Models that Qualify for Business Tax Deduction

BMW Luxury Vehicle Tax Advantage Savings - Sewickley BMW

Tax Advantages

Since the BMW X5, X6, and X7 each have a Gross Vehicle Weight Rating (GVWR) which exceeds 6,000 pounds, they may be eligible for full depreciation during the first year of ownership when used solely for business purposes**. Purchasing an X5, X6, or X7 could potentially deliver significant tax advantages as compared to a similarly priced luxury sedan.


Tax Depreciation Comparison

Listed below are three comparisons that illustrate the tax depreciation advantages for business owners who purchase a new BMW X5, X6, or X7 before December 31, 2020†. Please consult with your tax professional in order to determine how this information can be applied to your individual business situation.

BMW X5

$66,750 BMW X5 vs $66,750 Luxury Car

Total allowable depreciation for 1st year of ownership*
BMW X51
100% Depreciation
$66,750
VS Luxury Car2
27% Depreciation
$18,100

View New X5 Inventory

BMW X6

$78,300 BMW X6 vs $78,300 Luxury Car

Total allowable depreciation for 1st year of ownership*
BMW X61
100% Depreciation
$78,300
VS Luxury Car2
23% Depreciation
$18,100

In this situation, your business could deduct 100% of the X6 cost (a $78,300 Tax Deduction for Your Business), but your business can’t even deduct the normal 27% 1st-year deduction on the luxury sedan because that amount is CAPPED at $18,100. So instead of $21,100 as a 1st-year depreciation deduction, you can only claim a maximum of $18,100.

View New X6 Inventory

BMW X7

$92,600 BMW X7 vs $92,600 Luxury Car

Total allowable depreciation for 1st year of ownership*
BMW X71
100% Depreciation
$92,600
VS Luxury Car2
20% Depreciation
$18,100

In this situation, your business could deduct 100% of the X7 cost (a $92,600 Tax Deduction for Your Business), but your business can’t even deduct the normal 27% 1st-year deduction on the luxury sedan because that amount is CAPPED at $18,100. So instead of $25,000 as a 1st-year depreciation deduction, you can only claim a maximum of $18,100.

View New X7 Inventory

Individual tax situations may vary. The information presented was accurate at time of publishing. Federal rules and tax guidelines are subject to change. Consult your tax advisor for complete details on rules applicable to your business.

*Comparisons based on Section 179 and 168(k) of the Internal Revenue Code, which allows for additional first year depreciation for eligible vehicles and reflects figures for owners who purchase vehicles for 100 percent business use and place vehicles in service by December 31, 2020.

1BMW X5/X6 shown fully depreciated in Year One.

2Luxury car depreciation can continue year two at $16,100, year three at $9,700, and subsequent years at $5,760 until the vehicle is fully depreciated or sold.

**With Gross Vehicle Weight Ratings (GVWR) of more than 6,000 pounds, these BMW models are classified as “heavy SUVs.” Gross Vehicle Weight Rating (GVWR) is the manufacturer’s rating of the vehicle’s maximum weight when fully loaded with people and cargo.

Comparisons based on Section 179 and 168(k) of the Internal Revenue Code, which allows for additional first year depreciation for eligible vehicles and reflects figures for owners who purchase vehicles for 100 percent business use and place vehicles in service by December 31, 2020.