How to Take a 100% Tax Write-Off for a New Porsche, BMW or Cadillac

Looking for a way to lower your tax liability in 2011? Thanks to a temporary tax law, you can write off the full cost of many luxury SUVs as long as it is used 100% for business, and weighs at least 6,000 lbs. Remember the “Hummer loophole?” Yep, it’s back and it’s even more ridiculous.

According to Fortune.com, vehicles that qualify include: the Porsche Cayenne Turbo, the BMW X6 M, and the Ford Lincoln Navigator.

If this high octane tax deduction sounds to you like an echo from the past, it is. Early last decade, there was a public furor over the “Hummer loophole” which allowed small business owners and self employed folks (including doctors, real estate agents and others with a purported business use for a vehicle) to deduct most of the cost of purchasing big SUVs.

Back then, taxpayers were exploiting Section 179 of the U.S. Tax Code – a provision designed to allow small businesses to expense (or immediately write off) small capital investments. As part of the 2003 Bush tax cuts, the maximum Section 179 write-off was increased from $24,000 to $100,000. In October 2004, after the Hummer hullabaloo, Congress limited the write-off for trucks weighing between 6,000 and 14,000 pounds to $25,000, curbing luxury SUVs’ tax appeal. (Write-offs for luxury cars were already more limited.)

But as my colleague Ashlea Ebeling explains in a story here in Forbes about smart tax moves for the next two years, an immediate SUV write off is allowed again under a different, even more generous provision of the tax code, good through Dec. 31, 2011. She writes:

Last December’s bipartisan tax deal included a temporary 100% write-off (known as 100% bonus depreciation) for new equipment placed in service by Dec. 31, 2011. This break, which is unlikely to be extended, isn’t just for big companies. “It could be significant savings for the little guy, too,” says Howard Krant, a New York City CPA. He notes that 100% bonus depreciation can be more valuable than another, longer-standing 100% write-off provision (known as Section 179) available to small businesses. That’s because you can’t use Section 179 to claim a loss.

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Writing Off Job-Related Moving Costs

Unfortunately, job-related moving expenses are amongst the more commonly forgotten tax write-offs. However, as Don’t Mess With Taxes—one of my favorite tax blogs—explained in a new entry, taking advantage of incentives for moves related to a new job are actually more straightforward then you might think.

Moving tax tips: One of the nice things about moving for a job is that you can deduct some of those costs. Even better, you don't have to itemize to claim these expenses.

You must, however, meet a couple of basic requirements.

The move has to be work related. You can't simply write off a change of scenery.

You also must meet the IRS' time and distance tests.

"Time" means you have to work at your new location for at least 39 weeks in the first year after your move.

"Distance" requires that your new job be at least 50 miles farther from your previous residence than your last office was from that home. Basically, the IRS isn't going to help pay for a move that simply provides you an easier commute.

If you're reentering the full-time workforce, you can claim the deduction even if you don't have a job when you move.

If you're married and file jointly, only one spouse needs to meet both the time and distance tests.

Filing basics: As for filing itself, you do have to fill out another piece of tax paperwork, Form 3903.

And, no surprise here, the IRS has plenty of moving deduction do's and don'ts. Here are some of the more interesting ones.

Costs to transport pets are deductible.

So is the cost to have your car hauled to your new home.