Tax Blog
Are you a business owner looking into purchasing a new vehicle? The IRS provides a deduction when a business owner purchases a vehicle that weighs more than 6,000 pounds.
Section 179 of the IRS tax code essentially allows businesses to deduct the full purchase price of certain equipment and vehicles purchased before December 31st of a given tax year. This means that you may be able to deduct the entire purchase price of that vehicle from your gross income. The equipment and vehicles purchased under Section 179 must be used for business purposes more than 50% of the time to qualify for the deduction.
Section 179 does limit the total amount that can be deducted. In 2021, the total write-off amount was limited to $1,050,000 and the entire deduction is eliminated if equipment and vehicles reach $3,630,000.
To meet the weight criteria of Section 179, the manufacturer’s gross vehicle weight rating (GVWR) must be greater than 6,000lbs. The manufacturer’s label, generally located on the inside of the driver’s side door, will verify the GVWR of a vehicle.
Here is a list of some vehicles that may be eligible for this tax deduction:
- Cadillac Escalade
- Chevrolet Silverado
- Chevrolet Suburban
- Dodge Durango
- Dodge Grand Caravan
- Ford Expedition
- Ford Explorer
- Ford F-150
- GMC Sierra
- GMC Yukon
- Jeep Grand Cherokee
- Land Rover Range Rover
- Land Rover Discovery
- Lincoln Navigator
- Mercedes-Benz G550
- Toyota 4Runner
The professionals at The Center are more than knowledgeable on a variety of deductions, for more information, please contact us at (618) 997-3436.
