If you or your spouse runs a business (including a sideline business), you might benefit from the tax law signed in March 2002. Under this new law, businesses can write off up to 30 percent of the cost of certain machinery and equipment purchased after September 10, 2001.
This “bonus” depreciation is in addition to the regular first-year depreciation deduction and the so-called Section 179 “expensing” deduction. Eligible property includes computers, machinery, furniture and equipment, many types of software, vehicles, and certain improvements to leased commercial property.
Moreover, luxury cars (virtually all cars, under the tax code) have significant limits on permissible depreciation deductions. The new law may enable you to claim an extra $4,600 worth of depreciation deductions in the year a business car is placed in service, so check with your tax pro. You can amend your 2001 tax return to take advantage of the new tax breaks that apply to you.