Section 179 Vehicle Deductions for Small Businesses

A Comprehensive Guide and 2024 Eligible Vehicle List

Section 179 is a strategic tax-saving advantage available to business owners purchasing business vehicles and other eligible equipment. Eligible vehicles include heavy SUVs, work vehicles, delivery vans, and specialized vehicles. The IRS allows for depreciation of up to 80% of the purchase price in 2023. Advanced depreciation benefits are currently scheduled to sunset in the subsequent years ahead. Per IRS guidance, depreciation benefits will be 60% in 2024, 40% in 2025, and 20% in 2026. Consult IRS Pub. 946 for official guidance around 179 depreciation rules.

Link to IRS Publication HERE

List of qualifying vehicles:

  • Heavy SUVs, pickups, and vans (over 6,000 lbs. GVWR, >50% business use)
  • Work vehicles (dump trucks, tractors)
  • Delivery vans (cargo vans, box trucks)
  • Specialized vehicles (hearse, ambulance)
  • *Note: Heavy SUVs max deduction: $30,500 in 2024.

Qualification varies based on use and GVW. Consult your accountant for details. Note: Vehicle weights are estimates and may vary due to factors like engine size and trim.

BMWX5 xDrive45e7,165
BMWX6 M50i6,063
BMWX7 xDrive40i7,143
BMWX7 M50i7,143
BMWX7 M50d7,143
BentleyBentayga Hybrid7,165
BentleyBentayga Speed7,275
BentleyFlying Spur6,724
BentleyFlying Spur V86,724
BentleyFlying Spur W126,724
BentleyMulsanne Speed6,173
BentleyMulsanne Extended6,617
BuickEnclave Avenir AWD6,160
BuickEnclave Avenir FWD6,055
BuickEnclave Essence AWD6,160
BuickEnclave Essence FWD6,055
CadillacEscalade ESV7,300
CadillacEscalade Platinum7,100
CadillacEscalade ESV Platinum7,300
ChevroletSilverado 2500HD10,000
ChevroletSilverado 3500HD14,000
ChevroletSilverado 4500HD16,500
ChevroletSilverado 5500HD19,500
ChevroletSilverado 6500HD23,500
ChevroletExpress Cargo Van 25008,600
ChevroletExpress Cargo Van 35009,900
ChevroletExpress Passenger Van9,600
DodgeDurango SRT6,500
DodgeDurango Citadel6,500
DodgeDurango R/T6,500
DodgeDurango GT6,500
DodgeDurango SXT6,500
DodgeGrand Caravan6,055
FordExpedition MAX7,700
FordF-250 Super Duty10,000
FordF-350 Super Duty14,000
FordF-450 Super Duty16,500
FordF-550 Super Duty19,500
FordTransit Cargo Van T-250 HD9,070
FordTransit Cargo Van T-350 HD10,360
FordTransit Passenger Wagon10,360
GMCSierra 2500HD10,000
GMCSierra 3500HD14,000
GMCSierra 3500HD Denali14,000
GMCSierra 4500HD16,500
GMCSierra 5500HD19,500
GMCSierra 6500HD22,900
GMCYukon XL7,800
JeepGrand Cherokee6,500
JeepGrand Cherokee SRT6,500
JeepGrand Cherokee L6,500
JeepWrangler Unlimited6,500
JeepGladiator Rubicon6,250
Land RoverDefender 110 & 1307,165
Land RoverDefender 907,055
Land RoverDiscovery7,165
Land RoverDiscovery Sport6,724
Land RoverRange Rover7,165
Land RoverRange Rover Sport7,165
Land RoverRange Rover Velar6,724
Land RoverRange Rover Evoque6,724
Land RoverRange Rover Evoque R-Dynamic6,724
LexusLX 5707,000
Mercedes-BenzGLS 580 4MATIC6,768
Mercedes-BenzGLS 600 4MATIC6,768
Mercedes-BenzG 550 4×4 Squared7,057
Mercedes-BenzGLS 580 4MATIC6,768
Mercedes-BenzGLS 600 4MATIC6,768
Mercedes-BenzAMG G 63 4MATIC SUV6,724
NissanArmada 2WD/4WD7,300
NissanNV 1500 S V68,550
NissanNVP 3500 S V69,100
NissanTitan 2WD S7,300
PorscheCayenne Turbo Coupe6,173
PorscheCayenne Turbo S E-Hybrid Coupe6,173
PorscheCayenne Turbo S E-Hybrid6,173
PorschePanamera Turbo S E-Hybrid6,244
TeslaModel X6,000
ToyotaTundra 2WD/4WD6,800
Toyota4Runner 2WD/4WD LTD6,300
ToyotaSequoia 2WD/4WD6,800

Eligibility and Benefits of Section 179 Deduction for Vehicles

Qualification of Vehicles: New and used vehicles can both qualify for the Section 179 tax deduction, as long as they meet the model and GVWR criteria. Used vehicles must be considered “new to you.”

Timeframe: To claim the Section 179 deduction in 2024, the vehicle must be purchased and put into service between January 1 and December 31 of the same year.

Financing and Deduction: Financing a vehicle and claiming the Section 179 deduction is possible. This approach can enhance cash flow by deducting the entire vehicle cost while making smaller payments.

Limits and Caps: In 2024, the deduction limit is $1,220,000, with a total equipment spending cap of $2,890,000. Vehicle deduction varies based on cost and business use percentage.

Business Use Classification: The IRS categorizes vehicle use into business, commuting, and personal. Business use is deductible, while commuting and personal use aren’t, even if some business activity occurs.

Calculating Business-Use Percentage: Determine the business-use percentage by dividing total business miles by total miles driven. Apply this percentage to the vehicle’s cost for the Section 179 deduction.

Bonus Depreciation: Businesses can claim extra first-year depreciation (60% in 2024) on eligible assets, including some vehicles. There are limits for heavy SUVs and vehicles under 6,000 lbs GVWR.

Record-Keeping: Maintain thorough records – mileage logs, receipts, invoices – for at least three years to substantiate your business use claim during IRS audits.

Tax-Saving Strategies: Financing and year-end purchases can enhance tax savings through the Section 179 deduction.

Used Vehicles: Used vehicles can qualify if they’re new to you and your business, with over 50% business use.

State-Specific Rules: Some states have specific Section 179 rules; consult your state’s Department of Revenue or a tax professional.

Conclusion: Understanding Section 179 is crucial for small businesses aiming to optimize tax savings. Select a qualifying vehicle, maintain accurate records, consult experts, and stay updated on tax laws to harness this tax incentive.

Disclaimer: This page provides general information, not tax advice, and does not guarantee specific deductions. Consult your accountant for tax matters.