Depreciation for passenger vehicles put in service in 2014 has dropped significantly, with lawmakers allowing bonus depreciation to end after 2013. The first year ceiling for autos returns to $3,160, a reduction of $8,000. The second and third year caps are $5,100 and $3,050. After that, $1,875 a year.
Leasing a vehicle for business use is a bit more expensive in 2014. If a vehicle is worth more than $18,500, is leased for business this year, the lessee must pay income tax annually on an amount defined in IRS tables. The extra income in part, offsets the lessee’s tax deduction of the lease payments, and is intended to be comparable to the reductions on depreciation for buyers.
For example, on a three year lease for a $35,000 car put in service in 2014, you add $16 to your income in 2014, $36 the next year and $52 in 2016. These amounts are higher than for 2013. For complete details refer to Revenue Procedure 2014-21.
Remember the deductions for vehicles is adjusted for business use based on business miles.