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Passenger Automobiles: Business Depreciation (2025 IRS Guide)

This guide covers “Passenger Automobiles” within business depreciation. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 946 (2025), How To Depreciate Property, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim for a passenger automobile (defined earlier) each year is limited.

This section describes the maximum depreciation deduction amounts for 2025 and explains how to deduct, after the recovery period, the unrecovered basis of your property that results from applying the passenger automobile limits.

Passenger Automobiles

The maximum deduction amounts for most passenger automobiles are shown in the following table.

Maximum Depreciation Deduction for Passenger Automobiles (Including Trucks and Vans) Acquired After September 27, 2017, and Placed in Service Before 2026

Date 4th &
Placed 1st 2nd 3rd Later
in Service Year Year Year Year
2025 $20,2001 $19,600 $11,800 $7,060
2024 $20,4002 $19,800 $11,900 $7,160
2023 20,200 3 19,500 11,700 6,960
2022 19,2004 18,000 10,800 6,460
2021 18,2005 16,400 9,800 5,860
2020 18,1005 16,100 9,700 5,760
2019 18,1006 16,100 9,700 5,760
2018 18,0007 16,000 9,600 5,760
1If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $12,200.
2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $12,400.
3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $12,200.
4 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $11,200.
5 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $10,200.
6 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $10,100.
7 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $10,000.

Maximum Depreciation Deduction for Passenger Automobiles (Including Trucks and Vans) Acquired Before September 28, 2017, and Placed in Service Before 2020

Date 4th &
Placed 1st 2nd 3rd Later
in Service Year Year Year Year
2019 $14,9001 $16,100 $9,700 $5,760
2018 16,4002 16,000 9,600 5,760
1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $10,100.
2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum depreciation deduction is $10,000.

Maximum Depreciation Deduction for Passenger Automobiles Placed in Service Before 2018

Date 4th &
Placed 1st 2nd 3rd Later
in Service Year Year Year Years
2017 $11,1601 $5,100 $3,050 $1,875
2016 11,1601 5,100 3,050 1,875
2015 11,1602 5,100 3,050 1,875
2014 11,1603 5,100 3,050 1,875
2013 11,1603 5,100 3,050 1,875
2012 11,1603 5,100 3,050 1,875
2011 11,0604 4,900 2,950 1,775
2010 11,0604 4,900 2,950 1,775
2009 10,9605 4,800 2,850 1,775
2008 10,9605 4,800 2,850 1,775
2007 3,060 4,900 2,850 1,775
2006 2,960 4,800 2,850 1,775
1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160.
2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Also, if you placed the vehicle in service in a tax year beginning in 2015 and ending in 2016, and you elected to accelerate certain credits in lieu of the special depreciation for that tax year, the maximum deduction is $3,160.
3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160.
4 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060.
5 If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $2,960.

Caution:

If your business/investment use of the automobile is less than 100%, you must reduce the maximum deduction amount by multiplying the maximum amount by the percentage of business/investment use determined on an annual basis during the tax year.

Caution:

If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. The numerator of the fraction is the number of months and partial months in the short tax year, and the denominator is 12.

Example.

On April 15, 2025, you bought and placed in service a new car for $14,500. You used the car only in your business. You file your tax return based on the calendar year. You do not elect a section 179 deduction and elected not to claim any special depreciation allowance for the 5-year property. Under MACRS, a car is 5-year property. Because you placed your car in service on April 15 and used it only for business, you use the percentages in Table A-1 to figure your MACRS depreciation on the car. You multiply the $14,500 unadjusted basis of your car by 0.20 to get your MACRS depreciation of $2,900 for 2025. This $2,900 is below the maximum depreciation deduction of $12,200 for passenger automobiles placed in service in 2025. You can deduct the full $2,900.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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