What is the Section 179 Tax Deduction?

2022 BMW X6 Front View

We know how important it is for you to run your Topeka business smoothly, and that includes upgrading your fleet of vehicles. That’s why our experts at Aristocrat Motors Topeka are dedicated to helping you find a high-quality vehicle you can trust to get the job done right. No matter what style of vehicle you’re looking for to help build your fleet, you have the trusted team at Aristocrat Motors Topeka on your side, as well as Section 179. Did you know that you might be able to take advantage of the Section 179 deduction for your business when you purchase an eligible vehicle?

What is Section 179? The Section 179 deduction is designed to help you invest in your business by allowing you to write off a certain amount of your vehicle’s purchase price from your gross income. Section 179 deductions do have some nuances, though, so you’ll want to talk to a tax advisor if you’re considering taking advantage of it. In the meantime, our finance professionals at Aristocrat Motors Topeka are happy to go over the general details of Section 179 with you today! Continue reading with this guide from Aristocrat Motors Topeka to make heads-or-tails of what vehicles can qualify for the Section 179 tax deduction and more.

Section 179 Vehicle Qualifications

As we mentioned, there are some limitations to Section 179. Not every vehicle is eligible for tax deductions. However, technically any work vehicle that is strictly used for business purposes around Kansas City will almost always qualify. Standard passenger cars, trucks, and SUVs may also be eligible if they’re used for qualified business purposes 50% of the time.

It’s recommended that you talk to a tax professional in the Manhattan area who knows the ins and outs of Section 179 before you make a final decision on a vehicle purchase for your business. Typically, if the vehicle has any of the following traits, there’s a good chance it qualifies for the Section 179 deduction:

  • 9+ passenger seating capacity
  • Fully-enclosed driver’s compartment
  • No seating behind driver’s seat
  • Gross Vehicle Weight Rating between 6,000 pounds & 14,000 pounds

If the vehicle doesn’t have any of these traits but 50% of the time it’s being used is for qualified business use, then it may still be eligible. Our suggestion is to reach out to a tax advisor you trust for extra guidance on Section 179 eligible vehicles.

Section 179 Vehicle Types
The Internal Revenue Service (IRS) breaks down the list of vehicles that qualify for Section 179 deduction into three primary groups: Light, Heavy, and Other. The allowable deduction differs for each group.

  • Light Section 179 Vehicles
    Any vehicle with a manufacturer’s gross vehicle weight rating (GVWR) under 6,000 pounds (3 tons).
    This includes many passenger cars, crossover SUVs, and small utility trucks.
    For 2023, these autos have a Section 179 tax deduction limit of $12,200 in the first year they are used. If the extra $8,000 of Bonus Depreciation is also factored in, you can deduct up to a combined maximum of $20,200 for 2023.
  • Heavy Section 179 Vehicles
    Any vehicle with at least 6,000 pounds GVWR but no more than 14,000 pounds (3-7 tons).
    This includes many full-size SUVs, commercial vans, and pickup trucks.
    For 2023, a vehicle qualifying in the “heavy” category has a Section 179 tax deduction limit of $28,900. For 2023, the allowable bonus depreciation percentage is 80%.
  • Other Section 179 Vehicles
    Any vehicle with a GVWR over 14,000 pounds (7 tons) OR a vehicle modified for nonpersonal use. Specifically:
    Shuttle Vehicles having more than nine passengers behind the driver’s seat
    Delivery Vans having a cargo area of at least six feet in interior length not easily accessible from the passenger area
    Vehicles with an integral enclosure fully enclosing the driver compartment and load-carrying device, no seating behind the driver, and no portion of the body extending more than 30 inches beyond the windshield.

For 2023, any vehicle meeting the above weight or modification guidelines is not subject to a Section 179 tax deduction limitation. You may deduct up to 100% of the cost of any vehicle falling into this category.

Find a Section 179 Vehicle with the Help of Aristocrat Motors Topeka!

Now we’ve answered, “What is Section 179?” Are you ready to find your very own dependable vehicle to enhance your fleet and to help your business succeed? Aristocrat Motors Topeka has you covered. Let us know when you’re ready to grow your business fleet today, which starts with getting your credit approved online! Our team is always on the lookout for more ways to help your business succeed and grow, so reach out to us today.

Restrictions may apply. Please contact the dealer and a tax professional for full details. The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations. All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice. You should consult your own legal, tax or accounting advisors before engaging in any transaction.