Summers McNea and Company PC logo

Summers, McNea & Company, PC


80 25th Street West, Billings, MT 59102


Phone: 406-652-2320

Fax:     406-652-2043

June 2019

Safe Harbor

Insights and Tips

The IRS has provided guidance on a safe harbor method for determining depreciation deductions for passenger automobiles acquired and put into service after September 27, 2017 that qualify for the 100% additional first-year depreciation deduction.

Limit Increased
Recent tax law changes increased the first-year limitation amount for a passenger automobile that qualifies for this additional first-year depreciation deduction. The safe harbor allows depreciation deductions for the excess during the recovery period. The depreciable amount exceeding the new first-year limit is deductible in tax years immediately after the vehicle was placed in service.

Passenger automobiles placed in service by the taxpayer after 2022 can’t use the safe harbor. Neither can taxpayers that opted out of the 100% additional first-year depreciation deduction or elected under section 179 to expense any portion of the vehicle’s cost. Talk to your tax professional to learn more.


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