What is Section 179?

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.

What business vehicles may qualify?

  • Are a business that purchased or financed qualifying new or used business equipment, including certain business-use vehicles, during the 2023 tax year.
  • Put the equipment into service between January 1, 2023, and December 31, 2023.
  • Used this equipment for business purposes more than 50% of the time.
  • Spent less than $4,050,000 on this equipment.

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.

What business vehicles may qualify?

  • Are a business that purchased or financed qualifying new or used business equipment, including certain business-use vehicles, during the 2023 tax year.
  • Put the equipment into service between January 1, 2023, and December 31, 2023.
  • Used this equipment for business purposes more than 50% of the time.
  • Spent less than $4,050,000 on this equipment.

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.

*$28,900 tax deduction for qualifying vehicles based on current Section 179 of U.S. tax code and maximum deduction permitted for such vehicles under Section 179. Vehicles must be purchased for business use. Please consult your tax advisor. This information does not constitute, nor is it intended to be, legal, tax, financial planning or investment advice and should not be relied upon as such.

**$6,069 tax savings based on 21% federal corporate tax rate and eligibility to claim full $28,900 IRS Section 179 tax deduction for qualified vehicles. Your tax rate and eligibility may vary. Please consult a tax professional for more information on your federal tax rate and potential tax savings available to you for qualifying purchases. This information does not constitute, nor is it intended to be, legal, tax, financial planning or investment advice and should not be relied upon as much.

Offer valid through December 31, 2024. For more details, visit https://www.crestcapital.com/section-179-deduction-vehicle-list-over-6000-lbs#section2