Vehicle Depreciation Limits Drop Under Annual IRS Guidance

The IRS on Wednesday released the depreciation deduction limitations for passenger vehicles that taxpayers placed in service in 2025.

The 2025 rates chart (Rev. Proc. 2025-16) provided two depreciation limitation tables. The first table provides depreciation limitations for cars acquired after Sept. 27, 2017, and are eligible for bonus depreciation. The second chart provides the limit for cars not eligible for bonus depreciation.

The IRS changed both tables’ allowable dollar threshold amount to adjust for inflation. The depreciation limits for vehicles placed in service in 2025 are slightly lower than those for vehicles placed in service in 2024 ...