Get Section 179 Deduction for Buying a Business Vehicle 2024
Get a Section 179 Deduction for Buying a Business Vehicle. If we want our cars to last a long time, the cost of maintenance and parking is significant. Section 179 of the IRS allows you to deduct the cost of certain types of property on your income taxes as a business expense. This special deduction allows you to deduct up to the entire cost of the vehicle in the first year you use it if you are using it primarily for business purposes.
To take the deduction, you must use the car for business more than 50% of the time, and you can only deduct the percentage you use for work and the vehicle must meet certain requirements, such as weighing between 6,000 and 14,000 pounds.
Section 179 Vehicles 2025: How It Works
To qualify for the Section 179 deduction, you must use a vehicle for business purposes and not for personal use more than 50% of the time. If used for 50% or less, you will not qualify for any Section 179 deduction. As a self-employed worker, freelancer or independent contractor you can claim tax deductions for your driving expenses that can substantially lower your taxes. If you own a car and use it for business purposes, you can deduct mileage and car-related expenses as a business deduction.
How do I know if my vehicle qualifies for Section 179?
If you use a vehicle for more than 50% and less than 100% for business purposes, you’ll be qualified and will need to calculate the allowable deduction. The IRS states that if you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. The result is the cost of the property that can qualify for the Section 179 deduction.
Vehicles That Qualify for Section 179 deduction
- Vehicles that are used for work and cannot double as personal vehicles, such as forklifts or trailers, or those that seat more than nine passengers behind the driver’s seat such as hotel or airport shuttle vans.
- Specialty work vehicles such as hearses or ambulances.
- Delivery-type vehicles, such as cargo vans or box trucks with no passenger seating.
- Pickups and vans that are used for business more than 50% of the time and exceed 6,000 pounds gross vehicle weight. These vehicles may qualify for at least a partial Section 179 deduction, plus bonus depreciation.
Limits on Section 179 Deductions
Three main categories for Section 179 Vehicle:
- For SUVs ($26,200 deduction limit): Any four-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways […] and that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight.
- For Cars ($18,200 deduction limit): For depreciation purposes, a car is any four-wheeled vehicle (including a truck or van) made primarily for use on public streets, roads, and highways. Its unloaded gross vehicle weight must not be more than 6,000 pounds.
- For Other vehicles (standard Section 179 limit of $1,050,000): These vehicles include the three exceptions outlined in the above section (i.e. certain large passenger vans, pick-up trucks, and cargo vans).
Section 179 Deductions and Depreciation
Section 179 deduction can also be used with a depreciation method called bonus depreciation to save on taxes when you buy a business vehicle. Section 179 deductions work like depreciation. The purpose of depreciation is to spread the expense (and tax deductions) of owning a business asset such as a car or truck over the life of that asset. Depreciation is normally deducted as an expense to the business over the life of the equipment or vehicle. However, a section 179 deduction allows you to take more of the expense of the purchase in the first year.
List of Section 179 deduction vehicles 2024
- Chrysler Pacifica.
- Dodge Durango, Grand Caravan.
- Ford Expedition, Explorer, F-150, and larger.
- Tesla Model X.
- Toyota 4Runner, Landcruiser, Sequoia, Tundra.
- GMC Acadia, Sierra, Yukon
- Honda Pilot 4WD, Odyssey
- Audi Q7.
- BMW X5, X6
- Buick Enclave
- Cadillac XT5, XT6, Escalade
- Chevrolet Silverado, Suburban, Tahoe, Traverse.
- Infiniti QX80, QX56.
- Jeep Grand Cherokee
- Nissan Armada, NV 1500, NVP 3500, Titan
- Porsche Cayenne.
- Land Rover Range Rover, Discovery.
- Lexus GX460, LX570.
- Lincoln MKT AWD, Navigator
- Mercedes-Benz G550, GLS, GLE, Metris, Sprinter.
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