What is Section 179?

Section 179, a business tax code, is a useful tool that offers tax deductions on select business equipment – such as vehicles – as an alternative to asset depreciation. It gives you a chance to deduct up to $28,900* of a qualifying vehicle from your business’s gross income during that tax year—that’s up to $6,069 in savings**. In some cases you may even be able to deduct the full purchase price of your vehicle. (Please consult your tax professional to find out if you qualify for the full amount). It’s especially helpful for small businesses who want their tax savings right away, rather than receiving them bit by bit over time through depreciation. It gives many businesses the financial leeway to purchase vehicles they need right away, rather than waiting.

WHICH BUSINESS VEHICLES MAY QUALIFY?

• Am I a business that purchased or financed a qualifying new or used business-use vehicle during the 2024 tax year?
• Did I put the equipment into service between January 1, 2024, and December 31, 2024?
• Was this equipment used for business purposes more than 50% of the time?
• Was less than $4,050,000 spent on this equipment?

Vehicles That May Qualify

How much could I deduct?

These are the limits:

• You cannot write off more than $1,160,000.
• The total amount of the equipment purchase cannot be more than $2,890,000. It phases out dollar-for-dollar after that, so once $4,050,000 is spent, the deduction goes away entirely.

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Steps to Claim the Section 179 Vehicle Deduction

To claim the Section 179 deduction for heavy vehicles, business owners must complete IRS Form 4562. This form calculates the depreciation and the premise for the qualifying vehicle. It is advisable to consult with a tax professional to ensure accurate completion of this form. This form must be completed with your tax return by the tax deadline.

To begin this process, please reach out to us today so we can discuss your options.