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Writing Off Your Vehicle

November 17, 20232 min read

Thinking of buying a new or used vehicle for your business?

Business vehicles are one of many great tax write-offs available to you as a business owner.

If the vehicle qualifies you could write-off the purchase price of the car or truck, plus the operating expenses if you use it for business.

But before you rush off to go car shopping it’s important you know what a “Section 179 Vehicle” is. And if possible, purchase one of those types of vehicles in order to maximize your tax deductions.

Section 179 of the tax code basically allows you to deduct the full purchase price of a vehicle (or other qualifying equipment) in the year you purchase it.

The Tax Cuts and Jobs Act that was passed in late 2017 also allows unlimited 100% first-year depreciation for the new or used vehicle as long as it is acquired and placed into service between 9/28/17 and 12/31/22.

In other words, if you buy a Section 179 Vehicle it can potentially save you A LOT of money on your taxes.

So what is a Section 179 Vehicle?

These are heavy SUVs, trucks and vans that must have a gross vehicle weight of at least 6,000 pounds. Typically vehicles will list their weight on the side door (so you can check there when you’re shopping).

Here’s an example of some of the vehicles that weigh over 6,000 pounds:

●         Audi Q7

●         BMW X5, X6

●         Buick ENCLAVE

●         Cadillac ESCALADE

●         Chevrolet Truck SILVERADO, SUBURBAN, TAHOE, TRAVERSE

●         Dodge Truck DURANGO 4WD

●         Ford Truck EXPEDITION 4WD, EXPLORER 4WD, F-150 4WD, FLEX AWD

●         GMC ACADIA 4WD, SIERRA, YUKON 4WD, YUKON XLGMC SIERRA

●         Honda ODYSSEY

●         Jeep GRAND CHEROKEE

●         Land Rover RANGE ROVER, RANGE ROVER SPORT

●         Lexus GX460, LX570

●         Lincoln MKT AWD

●         Mercedes Benz G550, GL 500

●         Nissan ARMADA 4W3, NV 1500 SV6, NVP 3500 SV6, TITAN

●         Porsche CAYENNE

●         Toyota 4RUNNER 4WD, LANDCRUISER, SEQUOIA 4WD, TUNDRA

●         Volkswagen TOUAREG HYBRID

If you use the vehicle entirely for business then you can write-off 100% of it. However, if it’s used, say 75% for business and 25% for personal use then you can only write-off 75% of it.

Your tax savings will depend on your situation but it’s not uncommon for people to basically get a 20-30% discount on their vehicle once they factor in the tax deductions.

And again, this is just ONE of many expenses you can write-off.

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