FAQ: Section 179 Tax Deduction for Commercial Trucks & Vans
Are you new to business ownership? Have you run a community-favorite business for many years? No matter your situation, you may need a commercial truck, van, or fleet of vehicles to help keep operations running smoothly. Before you make a decision, you should know that your business may be eligible for a section 179 tax deduction. To help you better understand this deduction and the process, John Amato Chrysler Dodge Jeep Ram has put together a guide to ensure you're properly informed.
Get started by searching our commercial vehicle inventory. Please don't hesitate to contact our Milwaukee, WI, dealership should you have any questions about commercial vehicles or regarding this tax deduction. Give our finance specialists a call at (414) 433-9249. For further savings, check out current specials.
What is the Section 179 Tax Deduction?
The section 179 deduction allows you to get a federal tax benefit from buying a new or used vehicle for business purposes. It helps you reduce business expenses.
How Do the Deductions Work?
If you use your vehicle primarily for your business, the section 179 tax deduction allows you to deduct a portion of the entire cost of the vehicle in the first year you drive it. You can opt for this expense deduction instead of, or in addition to, depreciating the vehicle, which spreads out the cost over several years.
Do I Qualify for Section 179 Deductions?
If your vehicle or vehicles are bought and used for business purposes during the year you apply for the section 179 tax deduction, then yes, you will qualify. Please note that leased vehicles are not eligible for this tax deduction. Additionally, the vehicle must be purchased by the company that plans on using it for business purposes.
If you plan on using the vehicle for transporting people or property for hire, you will not qualify. You also cannot deduct more than your net business income for the year.
Are There Section 179 Maximum Limits?
Yes. The total amount for section 179 tax deduction-eligible vehicles cannot exceed more than $1 million for a single year. If you're planning on buying an SUV for business purposes, the maximum allowable amount for the section 179 deduction is $25,500. Finally, you cannot use a section 179 tax deduction to cause your business to have a loss. However, you can carry over a section 179 deduction to the next year.
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