Vehicles and Article 179
The tax rules for car purchases have changed, which means businesses of all sizes have the opportunity to save money. Coupes, sedans, small trucks, and small SUVs can deduct up to $18,000 per vehicle1, while large trucks, SUVs, and vans can deduct up to 100% of the purchase price2. Federal tax depreciation only applies to vehicles used in trade or commerce and is subject to change without notice. The tax status of each tax is different – ask your tax adviser to determine your car tax deduction. For more information, visit irs.gov. This notice is for information purposes only and should not be construed as a tax liability, or as a guarantee that any tax benefit or tax deduction will be available or in any quantity.
UP TO $18,000
- Buick Lacrosse
- Buick Regal
- Buick Regal Sportback
- Buick Regal TourX
- Buick Verano
- Buick Cascada
- Buick Encore
UP TO 100% OF PURCHASE PRICE PER VEHICLE
- Cadillac Escalade
- Cadillac Escalade ESV
- Cadillac XT5 Crossover
- Chevrolet Suburban
- Chevrolet Tahoe
- Chevrolet Traverse
- Chevrolet Silverado 1500
- Chevrolet Silverado 2500HD
One of the more popular uses for Cadillac Escalade Section 179 deductions is vehicles. In fact, a few years ago, the Section 179 deduction was sometimes referred to as the “hummer tax loophole” because at the time it allowed businesses to buy large SUVs and write them off. While this particular use (or abuse) of the tax code has been modified with the limitations explained below, Section 179 is still beneficial when it comes to purchasing a vehicle for your business. Vehicles used in your business are eligible—but the total deduction limit for certain passenger vehicles is $11,160, while the minimum amount for other vehicles that, by their nature, is unlikely to be used for personal purposes is eligible for the full Section 179 deduction ( The full policy statement is available at: IRS.gov).
Note: The deduction for commercial vehicles is the same whether purchased outright, leased, or financed through Section 179 Qualified Financing.
Which commercial vehicles are eligible for the full Section 179 deduction?
Please note that business vehicle deduction rules are always changing and can be complex because many vehicles can serve both business and personal functions. It is easier to list typical vehicles that generally qualify for the full Section 179 for Cadillac Escalade deduction, and then discuss the rules for other vehicles. Many “work vehicles” that by their nature are unlikely to be used for personal purposes are generally always eligible for the full Section 179 deduction.
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This includes the following vehicles: Vehicles that can accommodate more than nine passengers behind the driver’s seat (i.
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e.: hotel/airport shuttles, etc.). Vehicles that have: (1) a fully enclosed cab/cargo area, (2) no seat at all behind the driver’s seat, and (3) no body part protruding more than 30 inches beyond the leading edge of the windshield In other words a classic van. Heavy construction equipment will qualify for the Section 179 deduction, as will forklifts and similar equipment. A typical “road” tractor trailer will qualify.
What are the limitations of a typical passenger car used for business?
For passenger cars, trucks, and vans used more than 50% in qualifying business use (not meeting the guidelines below), total deductions including Section 179 deductions and bonus depreciation are limited to $11,160 for cars $11,560 for trucks and vans . Exceptions include the following vehicles:
- An ambulance or hearse dedicated to your business
- Taxis, transporters, and other vehicles used exclusively to transport people or property for hire.
- Qualified non-personal use vehicles specially modified for commercial use (e.g., a work vehicle without a seat behind the driver, with permanent shelves installed, and the company name painted on the exterior)
- Other heavy-duty “non-SUV” vehicles and trucks that have a cargo area with an interior length of at least 6 feet (this area must not be easily accessible from the passenger area.) For example, many pickups with a full-size cargo bed will be eligible for the full deduction (though some “extended cab” pickups may have too small beds to qualify).
Limits for SUVs or crossovers with GVW over 6,000 pounds
Certain vehicles (with a gross vehicle weight rating above 6,000 lbs. but no more than 14,000 lbs.) are eligible for a deduction of up to $25,000 if the vehicle was purchased and put into service before December 31st and other conditions are met.
Updates / IRS Vehicle Guidelines
As mentioned, the ambiguity of commercial versus personal use can be complicated. For help, see page 6 of the Instructions for Form 2106 to read the exact IRS language. See the instructions for Form 4562 for complete IRS information on depreciation and amortization.
Vehicles must also be used for at least 50% of the time in business activities – if the vehicle is used for less than 100% of the time in business activities, these depreciation limits reduce the corresponding percentage of personal use. Remember, you can only apply for Section 179 in the tax year when the vehicle is “in service” – which means when the vehicle is ready and available – even if you don’t use the vehicle. Additionally, vehicles first used for personal purposes are not eligible for a later year if their use is changed to commercial use.