One of the more popular uses of Section 179 Deduction has been for vehicles. However, there are restrictions on which types of vehicles qualify for the full Section 179 deduction and which have limits.
General rules for all vehicles:
- Must be used for business at least 50% of the time
- Can only claim Section 179 in the year “vehicle placed in service”
- A vehicle first used for personal purposes and changed to business in a later year will not qualify
- Vehicles can be new or used (must be “new to you”)
- Vehicle can be financed with certain leases and loans, or bought outright
Passenger vehicles, SUVs and crossovers may or may not qualify for full Section 179 deduction. Any passenger vehicle with an unloaded gross vehicle weight (GVW) of less than 6,000 pounds will have limited deductibility. SUVs and crossovers classified as a passenger vehicle are subject to the same limitations as regular passenger vehicles. Vehicles with unloaded GVW over 6,000 pounds can take full advantage of the Section 179 deductions.
Vehicles that are specifically NOT subject to limitations:
- Ambulance or hearse used specifically in your business
- Taxis, transport vans, cargo vans and other vehicles designed (or modified) to transport people or cargo
- Heavy duty vehicles with adequate cargo area (most pickups and cargo vans will qualify)
To check a specific vehicle, select a make and model in the database below:
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(check with RPB to make sure your vehicle qualifies as this database is not designed to provide tax advice to be relied upon without consultation from your tax preparer)