Deductions and Write-Offs

In 2016, for passenger automobiles, the limits are $5,100 for the second tax year; $3,050 for the third tax year; and $1,875 for each successive tax year,
If placed in service between 2006 and 2011 then the allowed amount is $1,775. If placed in service between 2004 and 2005 then the allowed amount is $1,675.

The current tax law sets a specific annual dollar limitation (adjusted each year for inflation) on the amount of depreciation allowed for any "passenger automobile". generally referred to as the "luxury automobile" limitations.
The limitations apply to four-wheeled vehicles that are manufactured primarily for use on public streets, roads, and highways, and that are rated at 6,000 pounds gross vehicle weight (GVW) or less (except for trucks and vans, a vehicle's "unloaded" GVW rating is used).

Section 179 limits are now locked-in by the Protecting Americans from Tax Hikes Act of 2015 which allows businesses to write-off up to $500,000 of qualified equipment each year.
If you elect to expense section 179 property, you must reduce the amount on which you figure your depreciation or amortization deduction (including any special depreciation allowance) by the section 179 expense deduction.
You may elect to deduct all or part of the cost of certain qualifying property in the year you place the asset in service as opposed to recovering the cost over the assets useful life(depreciation). This choice is called a Section 179 Election.
Any disallowed amount in the current year may be carried over to future years.
The 179 deduction is reportable on IRS Form 4562. You can elect to expense part or all (up to $500,000) of the cost of section 179 property that you placed in service during the tax year and used predominantly (more than 50%) in your trade or business.

Most new business equipment can be either depreciated over its useful life or expensed immediately under Internal Revenue Code Section 179. The 2014 maximum deduction is $25,000 with a $200,000 Investment based ceiling. The 179 deduction for any taxable year may not exceed the taxpayer's aggregate income from the active conduct of trade or business by the taxpayer for that year. The 2013 maximum deduction was $500,000 with a $2,000,000 Investment based ceiling

Section 179 limits are now locked-in by the Protecting Americans from Tax Hikes Act of 2015 which allows businesses to write-off up to $500,000 of qualified equipment each year.
If you elect to expense section 179 property, you must reduce the amount on which you figure your depreciation or amortization deduction (including any special depreciation allowance) by the section 179 expense deduction.
You may elect to deduct all or part of the cost of certain qualifying property in the year you place the asset in service as opposed to recovering the cost over the assets useful life(depreciation). This choice is called a Section 179 Election.
Any disallowed amount in the current year may be carried over to future years.
The 179 deduction is reportable on IRS Form 4562. You can elect to expense part or all (up to $500,000) of the cost of section 179 property that you placed in service during the tax year and used predominantly (more than 50%) in your trade or business.

Beginning on January 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 56 cents per mile for business miles driven 23.5 cents per mile driven for medical or moving purposes 14 cents per mile driven in service of charitable organizations

The annual exclusion for gifts remains at $14,000 for 2014.

There is a phase-out of itemized deductions for taxpayers with AGI above $259,400 (individual filers), $311,300 (MFJ) and $285,350 for head of households.
The total reduction can not be more than 80% of the gross itemized deductions.

Bonus depreciation on purchases of race horses was reinstated in 2013 at 50%, which was the 2012 rate. The expense allowance was increased to $500,000 for this year and retroactively increased from $125,000 to $500,000 for horses purchased in 2012.
Accelerated depreciation for young racehorses continues through 2013.
Taxpayers can depreciate racehorses that are 24 months and younger when purchased and placed in service using a three-year schedule rather than the previous seven-year schedule.