Quick Facts About Section 179 Deductions
- You can get a tax write-off if you purchase a vehicle that has a GVWR over 6,000 pounds for business purposes.
- Section 179 deductions allow companies to write off up to $31,300 of the purchase price of a qualifying vehicle used for business purposes.
- Some buyers might also be eligible for bonus depreciation, which allows businesses to write off a “special depreciation allowance” that may be 100% for some qualified property.
- Companies must keep the vehicle in business use throughout its useful life or pay back part of the deduction.
A section of the IRS tax code provides additional deductions to business income in the year a company puts a car, truck, SUV, or van into service. The Section 179 deduction and bonus depreciation rules can reduce your company’s tax liability when you buy a vehicle for business use. Here is a rough calculation showing how a Section 179 deduction and bonus depreciation can save your small business money.
Section 179 Deduction: Example of a Calculation
Suppose you buy a used full-size SUV for $75,000 in 2025 to use exclusively for your business. Because it’s a heavy SUV and 100% of its use is for company business, you can take the limited Section 179 deduction of $31,300 on your 2025 tax return. Additionally, you can claim a first-year bonus depreciation deduction on the remaining cost of $43,700 ($75,000 minus $31,300). For 2025, the “special depreciation allowance” percentage depends on various factors.
- If your SUV is qualified property acquired and placed in service after January 19, 2025, the allowance may be 100% (unless you elect 40% in the first tax year ending after that date).
- Property placed in service between January 1, 2025, and January 19, 2025, may remain subject to the phase-down rules under prior law (often discussed as 40% for 2025).
If a 40% allowance applies, that’s $17,480 (40% of $43,700), for a total first-year write-off of $48,780 ($31,300 + $17,480). If a 100% allowance applies and you do not elect a lower percentage, the remaining $43,700 could be fully deductible that year (total potentially $75,000), subject to all applicable limits and requirements.
Keep reading below for information on how the business tax break on vehicles over 6,000 pounds works. Your tax advisor can help determine if Section 179 applies to your situation.
- What Is the Section 179 Deduction for Vehicles?
- What Cars Qualify for the Section 179 Deduction?
- What Is the Downside to Section 179 Deductions?
- Will Section 179 Go Away in 2025?
- Section 179 Definitions to Know
What Is the Section 179 Deduction for Vehicles?
The primary aim of Section 179 deductions is to encourage businesses to invest in themselves by purchasing vehicles and other equipment, which stimulates the economy. Check with your tax professional for advice on whether Section 179 can help you and your small business’s bottom line.
The Section 179 deduction is a significant tax benefit for many companies that buy and use vehicles for their business. The provision allows a company to write off some or all of the purchase price of a qualifying automobile in the year it is bought and put into service.
While limitations exist, the Section 179 deduction offers businesses with company vehicles an opportunity for substantial tax savings in the current tax year rather than spreading out a deduction as depreciation over the vehicle’s expected life. Generally, depreciation rules in tax law consider five years to be the “useful life” for most vehicles.
How Does the Section 179 Tax Break Work?
Business taxpayers complete IRS Form 4562 and select the Section 179 deduction when filing. Section 179 eligibility requires the vehicle to be used 50% or more for business purposes. Vehicles solely used for business receive the maximum deduction, and the amount decreases proportionately as personal use increases.
Under Section 179, businesses can deduct the cost of qualifying property as an expense rather than capitalizing and depreciating smaller amounts over several years. For heavy vehicles, those with a gross vehicle weight rating (GVWR) above 6,000 pounds, some vehicles may qualify for larger first-year deductions, but passenger-type SUVs (and certain similar vehicles) are subject to a $31,300 Section 179 cap in 2025, even if they exceed 6,000 pounds GVWR.
GVWR is the maximum allowable weight of a vehicle, including passengers and cargo. Most passenger vehicles have the GVWR printed on a safety compliance label on the inside edge of the driver’s side door or the door frame.
In addition to the deduction, some buyers might be eligible for bonus depreciation. The “special depreciation allowance” may allow an additional first-year write-off, which, for certain qualified property acquired and placed in service after January 19, 2025, may be 100% (with elections available in certain cases).
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What Cars Qualify for the Section 179 Deduction?
Vehicle eligibility depends on various factors, so consult your accountant or tax professional who’s familiar with your situation. The basic qualifying criteria are that the vehicle must be used for business within the first year of the purchase and that at least 50% of its operation must be for a business purpose.
In general, new and used vehicles bought or financed and put into business use in the same year may qualify under Section 179 deduction rules, which might permit you to deduct the full cost. However, the tax year 2025 limit on deductions for heavy SUVs primarily designed to carry passengers on public roads and rated between 6,001 and 14,000 pounds GVWR is $31,300.
The limitation does not apply to heavy vehicles that aren’t SUVs, including:
- Vans with seating for nine or more behind the driver’s seat, such as shuttle vans
- Vehicles with no seating behind the driver’s seat
- Vehicles with cargo areas not readily accessible from the passenger compartment
- Vehicles with no body section extending more than 30 inches beyond the windshield, such as many delivery vans
Vehicles with a GVWR under 6,000 pounds may qualify for Section 179 deductions, but the amount for light vehicles is less than that of heavy vehicles.
Deductions and depreciation dollar amounts are less when the vehicle operation is split between business and personal use. If business use is 50% or less, a company cannot claim a Section 179 deduction or bonus depreciation.
Heavy Vehicles Eligible for Section 179
Here is a list of 15 popular SUVs from model year 2025 with a GVWR greater than 6,000 pounds that may qualify for Section 179 deductions. The list is not comprehensive. Understand that GVWR figures vary by drivetrain, wheelbase, hybrid battery mass, and optional equipment, including wheel and tire packages. Check the door-jamb label on your vehicle, as some ratings are VIN-specific.
| Make and Model | Approximate GVWR (pounds) |
| Jeep Grand Cherokee/Grand Cherokee L | 6,050/6,500-6,700 |
| Ford Explorer | 6,060-6,150 (with 3.0-liter V6) |
| Jeep Wrangler 4xe | 6,450 |
| Toyota 4Runner | 6,005-6,505 |
| Toyota Grand Highlander | 6,010-6,340 |
| Ford Bronco 4-Door | 6,040-6,180 (with some 2.3-liter and all 2.7-liter models) |
| Chevrolet Tahoe | 7,400-7,600 |
| Ford Expedition | 7,200-7,600 |
| Chevrolet Traverse | 6,160 |
| Nissan Pathfinder | 6,063 (4WD Platinum) |
| GMC Yukon | 7,400-7,700 |
| BMW X5 | 6,173-7,055 |
| Dodge Durango | 6,500-7,100 |
| Jeep Wagoneer/Jeep Wagoneer L | 7,300-7,500/7,400-7,700 |
| Chevrolet Blazer | 6,001 |
MORE: Best SUVs of 2025
What Is the Downside to Section 179 Deduction?
Buy a vehicle for your business and claim a deduction to offset your tax liability. Nothing wrong with that, right? While that may be true, there are limits, and the deductions aren’t always as lucrative as they might be mentioned in casual conversation.
Still, cutting $31,300 from the cost of an $80,000 full-size SUV you use exclusively for your business is substantial.
The biggest potential downside of using the Section 179 deduction is that you must keep the vehicle in business use throughout its useful life. If you convert it from entirely business use to personal use, or the percentage of its business use falls below the 50% threshold, you have to pay back part of the deduction as a Section 179 recapture.
Be sure to discuss potential trade-offs with your accountant.
MORE: How To Buy a Car From Out-of-State
Did Section 179 Go Away in 2025?
Section 179 is part of the IRS tax code for tax year 2025 as an incentive for small and medium-sized businesses to purchase equipment needed for growth.
If you believe you were eligible for Section 179 in 2024 but didn’t claim the deduction on your company tax return, talk to a tax professional about amending the return to include the deduction.
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Section 179 Definitions to Know
Tax matters are complex, and we recommend you seek advice from professionals to help avoid mistakes and ensure you claim appropriate deductions. Meanwhile, let’s define a couple of terms we mentioned above.
Depreciation — Depreciation is a noncash accounting charge that reduces the value of an asset, lowering a company’s net earnings and tax liability. For example, if your business purchases a vehicle for $50,000, you could depreciate its value for tax purposes over its useful life of five years, recording a noncash expense of $10,000 for each of those five years.
Bonus Depreciation — Bonus depreciation is an accelerated tax deduction for businesses. Instead of spreading the cost of a tangible asset’s depreciation evenly across its useful life, bonus depreciation allows for a substantial tax break in the first year of ownership. Congress enacted bonus depreciation in 2002. Updates since then have changed eligibility requirements and bonus depreciation rates, and the rules changed again for 2025: IRS draft 2025 Form 4562 instructions state that P.L. 119-21 reinstated a 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025, and in some cases allows an election to take 40% instead of 100% in the first tax year ending after that date. Property placed in service between January 1 and January 19, 2025, (or acquired before January 20, 2025, and placed in service later) may remain subject to the prior-law phase-down rules.
Bottom Line on Section 179
The Section 179 deduction and bonus depreciation offer businesses significant tax incentives for purchasing heavy vehicles over 6,000 pounds GVWR, but note: The $31,300 figure is the special Section 179 cap for certain passenger-type SUVs and similar vehicles in 2025, while the overall Section 179 limit for 2025 is $2,500,000 (phase-out begins at $4,000,000). Bonus depreciation (“special depreciation allowance”) may be 100% for certain qualified property acquired and placed in service after January 19, 2025, with elections and exceptions.
Editor’s Note: We have updated this article since its initial publication.
