Section 179 Tax Benefit

 

What is Section 179?

The Section 179 Tax Code was created by the IRS to help small-sized and medium-sized businesses to grow and expand– but any sized business can benefit from this needed tax break. Businesses that qualify could save substantial amounts of money on commercial vehicles and other qualifying equipment! Have you bought vehicles this year? The limits for the 2025 tax season are:

  • Maximum Deduction: Businesses can deduct up to $2,500,000 in qualifying purchases.
  • Phase-Out Threshold: The deduction begins to phase out when total purchases exceed $4,000,000.
  • Complete Phase-Out: The deduction is completely phased out when purchases reach $6,500,000.

 

What are the qualifications?

  • Purchased or financed: The vehicle must be purchased or financed and titled in the business's name.Leased vehicles do not qualify for a Section 179 deduction, though lease payments may be deductible.
  • New or used: The vehicle can be either new or used, but it must be new to you and your business.
  • Placed in service: The vehicle must be purchased and put into use for business before the end of the tax year.
  • Over 50% business use: The vehicle must be used more than 50% of the time for business. Personal travel, including commuting, does not count toward this percentage. You must keep detailed mileage records to support your claim in case of an audit.
  • Not a related-party purchase: You cannot acquire the vehicle from a relative or other related party to claim the deduction.

 

What vehicles qualify??

  • Heavy work vehicles (over 14,000 lbs. GVWR): Specialized vehicles like dump trucks, buses, and commercial cargo vans that are not also used for personal transportation can be eligible for a full deduction of their purchase price.
  • Heavy SUVs, pickups, and vans (6,000 to 14,000 lbs. GVWR): These passenger-type vehicles, such as a Ford F-150 SuperCrew or Chevrolet Suburban, have a capped deduction. For the 2025 tax year, the limit is $31,300.
  • Light vehicles (under 6,000 lbs. GVWR): Most standard passenger cars and smaller SUVs are limited to a much smaller first-year deduction. For 2025, the cap is approximately $20,400, which includes bonus depreciation.

 

See If You Qualify for the Section 179 Tax Deduction Today

Reach out to us at 815-939-9600 or contact Alex the Fleet Manager directly at 815-351-7453 and we will be happy to answer any questions and go over the options available.