Need a tax deduction?

Are you a business owner?

You may be able to deduct up to 100% of the purchase price of select BMW models.

Business owners may be able to deduct up to 100% of the purchase price of select BMW models in the year the vehicle is placed in service. Recent federal tax law permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. Because the IRS treats vehicles over 6,000 pounds differently from standard passenger cars, several BMW models may qualify for this full first-year deduction.

What is 100% bonus depreciation?

Normally, a business vehicle's cost is deducted gradually over several years. Bonus depreciation lets a business deduct the cost up front, in the first year the vehicle is placed in service. For property acquired and placed in service after January 19, 2025, that first-year deduction is 100%, and the change is permanent.

Most passenger cars are subject to annual luxury auto depreciation limits. Vehicles over 6,000 pounds are treated differently, which is why qualifying BMW models may be eligible for the full deduction.

How to qualify

• The vehicle must be purchased, not leased. Leased vehicles do not qualify.
• It must be used at least 50% for business. The deduction is based on your business-use percentage.
• It must be a qualifying model over 6,000 pounds. For SAVs, this is based on gross vehicle weight rating (GVWR). For passenger cars such as the BMW i7 xDrive60, it is based on unloaded gross vehicle weight.
• It must be placed in service during the tax year. The deduction applies to the year the vehicle is ready and available for business use.
• New and pre-owned vehicles can qualify. A pre-owned vehicle qualifies as long as your business has not used it before and did not buy it from a related party.

What about Section 179?

Section 179 is a separate provision that also allows a first-year deduction for business vehicles. Unlike bonus depreciation, it has dollar limits, including a lower cap for heavy SUVs, and the deduction generally can’t exceed your business income for the year. Some businesses use Section 179 together with bonus depreciation. Your tax advisor can help determine which approach is best for your business.

Planning a purchase before year-end?

To claim the deduction for this tax year, the vehicle must be placed in service, meaning ready and available for business use, by December 31.