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To determine the first-year depreciation of a new car used for business purposes, you can use the Modified Accelerated Cost Recovery System (MACRS) method. Under MACRS, a vehicle is classified as a 5-year property. For a vehicle costing $45,000, here's how you can determine the first-year depreciation: 1. Apply the percentage for the first year of the 5-year MACRS depreciation schedule, which is 20% for the first year. 2. Multiply the vehicle's cost by the depreciation rate: $45,000 x 20% = $9,000 So, the first-year depreciation for the new car is $9,000. Additionally, Section 179 allows small businesses to immediately expense up to $1,050,000 of qualifying property in 2022, subject to a phase-out threshold of $2,620,000. However, there are special limits for certain types of vehicles, particularly passenger vehicles. In 2022, the maximum first-year write-off for a passenger vehicle is $10,200, which includes the first-year bonus depreciation (if the vehicle is new and not used). You should check the IRS guidelines to see if your vehicle qualifies for bonus depreciation or if it is subject to any special limitations. As for interest on the loan and sales tax, you can generally deduct the interest expense for a loan used to purchase a business vehicle as a business expense. The interest deduction is claimed on Schedule C for sole proprietors or the appropriate business tax return for other business types. The sales tax paid on the vehicle can also be deducted as part of the cost basis of the vehicle, but it doesn't affect the depreciation amount. Keep in mind that if the vehicle is not used 100% for business purposes, the depreciation and interest deductions must be prorated based on the percentage of business use. Remember to consult with a tax professional to get personalized advice for your specific situation, as tax laws and regulations can be complex and subject to change.