Section 179 vehicles are models that qualify for tax deductions for your business. Deducting your vehicle, especially if you have a fleet or do a significant amount of driving for work, can make an enormous difference when tax season comes around. Learn about the different vehicle deductions for your business with help from Huntington Beach Hyundai.
What Vehicles Qualify?
Before you start taking long drives for work, you want to make sure you understand the parameters around Section 179 deductions. While you can deduct for passenger vehicles under 6,000 lbs gross vehicle weight rating (GVWR), the first-year depreciation gap is typically much lower. For heavy SUVS, trucks, and vans over 6,000 lbs GVWR, you’ll qualify for higher deductions. Vehicles also have to be used for business purposes more than 50 percent of the time in order to qualify.
How Much Can I Deduct for My Business?
If you’re running a business that requires a vehicle, it’s very useful to account for Section 179 deductions because they can be quite high. Vehicles under 6,000 GVWR have a maximum deduction of up to $12,000, and SUVs over 6,000 GVWR have a maximum deduction of $31,300.For other vehicles, specifically those with a GVWR of over 14,000 lbs or vehicles that have been modified for non-personal use, there is no limit to the deductions, though your total expense deduction limit is $2,500,000. These vehicles typically include food trucks, hearses, and sprinter vans. Remember that the full amount can only be deducted if the vehicle is used exclusively for business purposes.
