Section 179 Vehicle Tax Deduction 2026: Complete List with GVWR Data & Strategic Planning

You buy a $75,000 Ford F-250 Super Duty in November. Your business deducts $60,000 in year one. Not over five years. Year one.

That’s Section 179. And in 2025, the limits just got better.

The One Big Beautiful Bill Act (signed July 4, 2025) increased the Section 179 deduction limit from $1,160,000 to $2,500,000. Combine that with the reinstated 100% bonus depreciation, and you’ve got the most favorable business vehicle tax treatment since 2017.

I’ve handled hundreds of Section 179 vehicle deductions across partnerships, S-Corps, and LLCs. The pattern I see: business owners either overpay because they don’t know the rules, or they get surprised by recapture when they sell early. This guide gives you the exact vehicle list, GVWR data, deduction tiers, and strategic timing to avoid both mistakes.

2026 Section 179 Vehicle Deduction Limits:

• Heavy SUVs/Trucks (6,001-14,000 lbs GVWR): $32,000 maximum
• True Commercial Vehicles (>14,000 lbs or cargo-only): $2,560,000 maximum
• Passenger Vehicles (<6,000 lbs): $20,400 maximum
• Requirement: >50% business use, placed in service by December 31, 2026

What Is the Section 179 Vehicle Tax Deduction?

Section 179 of the Internal Revenue Code lets you expense (deduct) business asset purchases in the year you buy them instead of depreciating them over multiple years. Vehicles qualify because they’re tangible property used in your trade or business.

Instead of spreading a $75,000 truck purchase over five years ($15,000 annually via MACRS depreciation), Section 179 lets you take the full deduction in year one. Subject to limits based on vehicle weight and type.

2025 brought two major updates:

1. Section 179 limit increased to $2.5M (up from $1,160,000). This is your total annual cap across all equipment purchases, not per vehicle.
2. 100% bonus depreciation reinstated for property placed in service after January 19, 2025. This had dropped to 60% in 2024.

The combination matters. On a $90,000 Cadillac Escalade, Section 179 alone caps you at $31,300 (heavy SUV limit). But combine Section 179 ($31,300) with bonus depreciation ($58,700 on the remaining basis), and you deduct the full $90,000 in year one.

Compare that to standard MACRS depreciation without Section 179 or bonus:

• Year 1: $18,000 (20% of cost)
• Year 2: $28,800 (32%)
• Year 3: $17,280 (19.2%)
• Years 4-5: Remaining balance

You’d wait five years for the same write-off you can take immediately.

Real Client Scenario:

A partnership we work with purchased three Chevy Silverado 2500HD trucks in November 2024 for $210,000 total. Using Section 179, they deducted $93,900 ($31,300 × 3 trucks) in year one. We then applied bonus depreciation to the remaining basis ($116,100), writing off an additional $69,660 at the 60% rate (2024 rules). Total first-year deduction: $163,560 instead of spreading over five years.

Key requirements to qualify:

• Vehicle must be used >50% for business (tracked via mileage log)
• Vehicle must be “placed in service” during the tax year (available for business use by December 31)
• You must file Form 4562 with your tax return to make the Section 179 election

For broader context on year-end tax planning strategies, see our comprehensive tax planning guide.

2025-2026 Section 179 Vehicle Deduction Limits: What Changed

The One Big Beautiful Bill Act Impact (Signed July 4, 2025)

This legislation made Section 179 significantly more favorable:

Effective date: Retroactive to January 1, 2025. If you purchased qualifying equipment in Q1 2025 under the old limits, you can amend to claim the new higher limits.

The $2.5M limit is your total across ALL equipment purchases (vehicles, machinery, computers, software). If you buy $2.6M in equipment, you lose $1 of Section 179 for every dollar over the $4M phase-out threshold. At $6.5M in purchases, Section 179 is fully phased out (but bonus depreciation still applies).

100% Bonus Depreciation Reinstated

Bonus depreciation had been phasing down:

• 2023: 80%
• 2024: 60%
• 2025 (scheduled): 40%

The One Big Beautiful Bill Act restored it to 100% for property placed in service after January 19, 2025.

Why this matters for vehicles:

Section 179 has the $31,300 SUV cap. Bonus depreciation doesn’t. On heavy SUVs (6,001-14,000 lbs GVWR), you can use Section 179 up to $31,300, then apply 100% bonus depreciation to the remaining basis with no cap.

Example:

• Vehicle cost: $90,000 (Cadillac Escalade, 7,400 lbs GVWR)
• Section 179: $31,300 (SUV cap)
• Remaining basis: $58,700 ($90,000 – $31,300)
• Bonus depreciation (100%): $58,700
• Total year-one deduction: $90,000

Under 2024 rules (60% bonus depreciation), you’d deduct $66,520 in year one ($31,300 Section 179 + $35,220 bonus). The difference: $23,480 deferred to future years.

Heavy SUV Limit: $32,000 for 2026

This limit applies specifically to SUVs with GVWR between 6,001 and 14,000 pounds “primarily designed to carry passengers on public roads.” The IRS adjusts this cap annually for inflation.

Inflation adjustments:

• 2023: $28,900
• 2024: $30,500
• 2025: $31,300
• 2026: $32,000

Exceptions to the SUV cap:

1. Pickup trucks with 6+ ft cargo bed: Avoid the SUV cap even if designed for passenger use (IRS Notice 2018-59). A Ford F-250 crew cab with an 8-ft bed qualifies for full Section 179 expensing up to the $2.56M limit (2026), not the $32,000 SUV cap.
2. Cargo vans with no rear passenger seating: Not considered SUVs. Full Section 179 expensing applies.
3. Vehicles >14,000 lbs GVWR: No longer subject to SUV cap (commercial vehicle treatment).

Compare year-over-year limits:

Sources: IRS Revenue Procedure 2024-40, One Big Beautiful Bill Act summary

Complete Section 179 Vehicle List 2025-2026: Organized by Deduction Tier

GVWR (Gross Vehicle Weight Rating) determines your vehicle’s Section 179 treatment. You’ll find GVWR on the Federal certification label on the driver’s side door jamb. It’s not the curb weight (empty vehicle weight). GVWR is the maximum safe operating weight including vehicle, cargo, and passengers.

Example: A Ford F-250 has a curb weight around 6,800 lbs but a GVWR of 10,000 lbs.

Important: Manufacturer specs vary by trim level, engine, and configuration. Always verify GVWR for your specific vehicle before relying on these tables.

Tier 1: Full Expensing Eligible (Up to $2.5M Section 179)

Qualifies if:

• GVWR >14,000 lbs, OR
• Cargo-only vehicle (no rear passenger seating behind driver), OR
• Pickup truck with cargo bed ≥6 ft (even if <14,000 lbs GVWR)

Critical verification notes:

• Bed length matters: A Ford F-250 crew cab with a 5.5-ft bed gets the $31,300 SUV cap. The same truck with a 6.75-ft or 8-ft bed qualifies for full expensing (IRS Notice 2018-59).
• GVWR location: Check the driver’s door jamb sticker. Don’t rely on internet specs alone.
• Cargo vans: Must have zero rear passenger seating to qualify. Crew vans with rear bench seats get SUV treatment.

For strategic planning on vehicle ownership structures (company vs. personal), see our partnership tax services guide.

Tier 2: Heavy SUV Limit ($31,300 Section 179 Cap)

Qualifies if:

• GVWR between 6,001 and 14,000 lbs, AND
• “Primarily designed to carry passengers on public roads”, AND
• Not a cargo-only vehicle or pickup with 6+ ft bed

Key strategy: Use Section 179 for the $31,300, then apply 100% bonus depreciation to the remaining basis (no cap).

Combining Section 179 + Bonus Depreciation:

On a $90,000 Cadillac Escalade (7,400 lbs GVWR), you can take:

• $31,300 Section 179 deduction (SUV cap)
• $58,700 bonus depreciation (100% of remaining basis after Section 179)
• Total first-year deduction: $90,000 (assuming 100% business use)

This is where 100% bonus depreciation shines. No SUV cap limitation.

Short bed vs. long bed pickup trucks:

• Short bed (<6 ft): Gets SUV treatment, $31,300 Section 179 cap
• Long bed (≥6 ft): Avoids SUV cap, full Section 179 expensing up to $2.5M

A Ford F-150 crew cab with a 5.5-ft bed: $31,300 cap. Same truck with a 6.5-ft bed: Full expensing (no cap).

Bed length is measured from the inside of the bulkhead to the inside of the tailgate (closed position).

Tier 3: Luxury Auto Limits ($20,400 First-Year Cap)

Applies to:

• Passenger vehicles with GVWR <6,000 lbs
• Most sedans, crossovers, and small SUVs
• Limit applies even with 100% business use

The $20,400 cap combines Section 179 and bonus depreciation. You can’t use the two methods to exceed it.

2025 luxury auto depreciation limits (IRC §280F):

• Year 1: $20,400 (combined Section 179 + bonus + MACRS)
• Year 2: $19,800
• Year 3: $11,900
• Year 4+: $7,100 annually until fully depreciated

Electric vehicle considerations:

Some EVs approach the 6,000 lb threshold due to battery weight:

• Tesla Model X: Some configs exceed 6,000 lbs GVWR (check your specific VIN)
• Rivian R1S: Typically 7,000+ lbs GVWR (qualifies for $31,300 SUV cap)
• Hummer EV: 9,600+ lbs GVWR (cargo bed >6 ft, full expensing eligible)

EVs may also qualify for the federal EV tax credit (IRC §30D, up to $7,500). This credit is separate from Section 179/bonus depreciation but reduces your basis in the vehicle for depreciation purposes.

Leasing strategy for luxury autos:

When the $20,400 cap limits your deduction on a $80,000 sedan, leasing might provide better tax treatment. Lease payments are 100% deductible (business use percentage) without depreciation caps. We analyze lease vs. buy on a case-by-case basis.

For S-Corp company car strategies, see our S-Corporation tax guide.

How to Verify Your Vehicle Qualifies for Section 179

Step 1: Check the GVWR

Where to find GVWR:

1. Driver’s side door jamb: Look for the Federal certification label. It lists GVWR in pounds. This is your official source.
2. Owner’s manual: Specifications section (page 300+ in most manuals)
3. Manufacturer website: Enter your VIN to get exact specs for your configuration
4. Vehicle registration: Some states print GVWR on the title or registration (Texas does not)

What GVWR means:

GVWR (Gross Vehicle Weight Rating) is the maximum safe operating weight including:

• Vehicle curb weight (empty vehicle)
• Passengers
• Cargo
• Fuel

Example: A 2025 Ford F-250 crew cab has:

• Curb weight: ~6,800 lbs (empty truck)
• GVWR: 10,000 lbs (max loaded weight)
• Payload capacity: ~3,200 lbs (GVWR minus curb weight)

GVWR ≠ curb weight. The door jamb sticker GVWR determines your Section 179 treatment, not the vehicle’s actual weight when empty.

Step 2: Determine Vehicle Category

Is it an SUV?

• Built on truck chassis
• Enclosed passenger area
• Designed primarily for passenger transport on public roads
• Examples: Escalade, Suburban, Navigator

Is it a pickup truck?

• Open cargo bed
• Measure bed length inside (bulkhead to tailgate, closed)
• 6+ ft bed = avoids SUV cap (even if crew cab)
• <6 ft bed = SUV treatment if designed for passengers

Is it a cargo van?

• Check rear seating: Zero rear passenger seats behind driver = cargo van (full expensing)
• Any rear bench or seats = passenger van (SUV treatment)

Step 3: Calculate Business Use Percentage

Section 179 requires >50% business use. How to track:

Mileage log requirements:

• Date of each trip
• Starting location and destination
• Business purpose
• Miles driven
• Odometer readings at year start and year end

Calculation:

• Business miles ÷ Total miles = Business use %
• Example: 15,000 business miles ÷ 20,000 total miles = 75% business use

IRS standard: The log must be contemporaneous (recorded at or near the time of travel), not reconstructed at year-end. A reconstructed log won’t survive an audit.

Safe harbors:

• 100% business use: Vehicle used exclusively for business, no personal use
• Commuting: Not business use (home to regular work location is personal)
• Business errands during commute: Only the additional miles count as business

Tools:

• MileIQ app (automatically tracks via GPS, categorizes trips)
• Manual logbook (IRS Publication 463 has a sample template)
• Smartphone notes (dated entries with required details work fine)

Download SDO’s Business Vehicle Use Log Template (PDF) [We’ll create this as a lead magnet – simple Excel template with the 5 required fields]

Section 179 vs. Bonus Depreciation: Which Is Better for Your Vehicle?

Both Section 179 and bonus depreciation allow first-year expensing. But they have different limits, rules, and strategic applications.

Quick comparison:

Section 179 Advantages

1. Flexibility: You choose which assets to expense. Don’t want to take the full deduction this year? Elect a lower amount and carry forward the rest.

Example: Partnership buys a $75,000 truck but only has $50,000 in taxable income. Elect $50,000 under Section 179, carry forward $25,000 to next year (subject to 2026 limits).

2. Loss limitation workaround: Section 179 creates an ordinary business deduction. For S-Corps and partnerships, this can offset active income before hitting basis limitations.

3. Timing control: You decide how much to deduct. Bonus depreciation is all-or-nothing (unless you elect out).

Bonus Depreciation Advantages

1. No SUV cap: This is huge. On heavy SUVs (6,001-14,000 lbs GVWR), Section 179 caps at $31,300. Bonus depreciation has no cap.

Example: $90,000 Escalade

• Section 179 only: $31,300 deduction
• Bonus depreciation only: $90,000 deduction (100% of cost)
• Combined strategy: $31,300 (Section 179) + $58,700 (bonus) = $90,000 total

2. No phase-out: Doesn’t matter if you buy $10M in equipment. Bonus depreciation applies to all of it.

3. Passive activity friendly: Reduces basis for gain calculations, which can be advantageous in real estate or passive partnerships.

When to Use Section 179

Best for:

• Small businesses with <$4M in annual equipment purchases
• S-Corps with basis limitations (manage deductions to avoid excess losses)
• Vehicles that already qualify for full expensing (>14,000 lbs GVWR or cargo-only)
• Situations where you want to elect a specific deduction amount (<100% of cost)

Example scenario:

S-Corp owner has $80,000 in stock basis. Buys a $75,000 F-250 (full expensing eligible). Taking the full $75,000 deduction leaves $5,000 basis for other pass-through deductions. If the S-Corp has additional losses, they’re suspended.

Strategy: Use Section 179 to deduct $60,000 this year, carry forward $15,000 to 2026 (preserving basis for other deductions).

When to Use Bonus Depreciation

Best for:

• Heavy SUVs costing more than $31,300 (avoid Section 179 SUV cap)
• Large businesses exceeding $4M in equipment purchases (no phase-out)
• Maximizing first-year deductions without basis constraints
• Partnerships with passive activity considerations

Example scenario:

Partnership buys three vehicles:

1. $90,000 Escalade (7,400 lbs GVWR)
2. $85,000 Navigator (7,700 lbs GVWR)
3. $95,000 Range Rover (7,165 lbs GVWR)

Total cost: $270,000

Section 179 only strategy:

• $31,300 × 3 = $93,900 total deduction
• Remaining $176,100 depreciated over 5 years

Bonus depreciation strategy:

• $270,000 × 100% = $270,000 year-one deduction
• No SUV cap applies to bonus

Combined strategy (optimal):

• Section 179: $93,900 ($31,300 × 3)
• Bonus depreciation: $176,100 (remaining basis)
• Total year-one deduction: $270,000

The combined strategy matches bonus-only but provides flexibility (you could elect less Section 179 if needed).

S-Corp with Basis Limitations:

Client had $100,000 in S-Corp stock basis. Purchased a $90,000 Suburban. Taking the full $90,000 Section 179 deduction would leave only $10,000 basis for other pass-through items.

We recommended:

• $31,300 Section 179 (SUV cap)
• $58,700 bonus depreciation (remaining basis)
• Total year-one deduction: $90,000

But structured it so the client could manage basis limitations across multiple K-1 items. The flexibility in how Section 179 vs. bonus hit the partner’s basis helped optimize the overall tax result.

Strategic Timing: When to Buy for Maximum Tax Benefit

The December 31 Deadline

“Placed in service” requirement:

Your vehicle must be available for business use by December 31 to qualify for that tax year’s deduction. “Placed in service” means:

• Title transferred to you or your business
• Vehicle delivered and available for use
• Business use begins (even if just one day in December)

Not sufficient:

• Ordered but not delivered: Doesn’t count
• Paid deposit but no title transfer: Doesn’t count
• Delivered January 2: Counts for following tax year

December delivery risks:

• Dealer inventory shortages (especially for popular F-250/F-350 models)
• Shipping delays (custom orders can take 8-12 weeks)
• Year-end processing backlogs at DMV (title transfer delays)

Our recommendation: If you’re buying for year-end tax benefits, order by mid-October at the latest. Custom builds can take 90+ days. Dealer stock purchases in December work fine if the vehicle is physically available.

Q4 2025 vs. Q1 2026 Decision

Factors to consider:

1. Income levels:

• High-income year (2025)? Maximize 2025 deductions to offset
• Projected lower income (2026)? Deductions are more valuable at higher rates

Example:

• 2025 taxable income: $650,000 (37% marginal rate)
• 2026 projected income: $350,000 (32% marginal rate)
• $75,000 vehicle deduction saves $27,750 in 2025 vs. $24,000 in 2026

2. Tax law sunset risk:

• 100% bonus depreciation might not last (phase-down could resume)
• Section 179 limits indexed to inflation (likely to increase)
• Tax Cuts and Jobs Act provisions expire 12/31/2025 (some could revert)

3. Dealer incentives:

• Year-end clearance sales (December): Discounts on outgoing model year
• New model year releases (January-February): Higher prices, newer features
• Q1 fleet incentives: Commercial buyers often get better fleet pricing early in year

4. Business cash flow:

• Buying in Q4: Uses year-end cash reserves
• Financing in Q1: First payment typically deferred 45-90 days

Real client scenario:

Partnership Bought in December:

Client called November 28, 2024. Situation:

• 2024 net income: $850,000 (wanted to reduce)
• 2025 projected income: $600,000 (expansion year, lower margins expected)
• Considering: Three Ford F-250s for field operations ($225,000 total)

Analysis:

• 2024 tax savings: $93,900 deduction × 37% rate = $34,743
• 2025 tax savings: $93,900 deduction × 32% rate = $30,048
• Difference: $4,695 in additional tax savings by buying in 2024

Decision: Purchased three F-250s from dealer stock December 18, 2024

Result: $93,900 Section 179 deduction in 2024, saving $34,743 in taxes (federal). They’d been planning the purchase anyway, accelerating by 6 weeks saved $4,695.

Trade-In vs. Cash Purchase Tax Treatment

Trade-in:

• Reduces your basis in the new vehicle
• Lower basis = lower depreciation deductions
• Example: $75,000 new truck, $25,000 trade-in = $50,000 depreciable basis

Sell old vehicle separately + cash purchase new:

• New vehicle basis = full purchase price
• Gain/loss on old vehicle reported separately
• Example: $75,000 new truck = $75,000 depreciable basis

Which is better?

Trade-in advantage: Defer gain on sale of old vehicle (incorporated into new vehicle basis)

Sell separately advantage: Maximize depreciable basis on new vehicle

Example calculation:

Scenario: Buying a $75,000 F-250. You own a 2020 F-150 worth $25,000 (adjusted basis: $10,000 after depreciation).

Option 1 – Trade-in:

• New truck basis: $50,000 ($75,000 price minus $25,000 trade)
• Section 179 deduction: $50,000
• No gain recognized on trade-in
• Total year-one deduction: $50,000

Option 2 – Sell old truck separately:

• New truck basis: $75,000 (full purchase price)
• Section 179 deduction: $75,000
• Gain on old truck: $15,000 ($25,000 sale price minus $10,000 basis)
• Recapture as ordinary income: $15,000
• Net tax effect: $75,000 deduction minus $15,000 recapture = $60,000 net benefit

Option 2 is better by $10,000 in this scenario.

Exception: If selling the old vehicle creates a loss, trade-in might defer that loss in a way that’s disadvantageous. Analyze on a case-by-case basis.

Like-kind exchange rules (1031):

Post-2018, IRC §1031 like-kind exchanges no longer apply to personal property (including vehicles). They’re limited to real estate. You can’t defer gain via a 1031 exchange on vehicle trades anymore.

Requirements & Restrictions: What the IRS Scrutinizes

Business Use Requirement (>50%)

IRS safe harbor: If a vehicle is used exclusively for business (zero personal use), you can deduct 100% of the cost without maintaining a mileage log. But “exclusive” means never driven for personal reasons. One trip to the grocery store breaks the safe harbor.

Mixed-use vehicles (the common scenario):

You’ll allocate deductions based on actual business use percentage. Calculate annually:

• Total business miles ÷ Total miles = Business use %
• Business use % × Total deduction = Allowable deduction

Example:

• Vehicle cost: $75,000
• Section 179 potential: $75,000 (F-250 with long bed)
• Business miles: 18,000
• Total miles: 24,000
• Business use: 75% (18,000 ÷ 24,000)
• Allowable Section 179 deduction: $56,250 (75% × $75,000)

If business use drops below 50% in any subsequent year:

• Section 179 deduction is recaptured (see Recapture Risks below)
• Vehicle becomes “listed property” with heightened substantiation

What counts as business use:

• Client meetings, job sites, supplier visits: Yes
• Commuting (home to regular work location): No
• Business errands during commute: Only the additional miles
• Driving to bank to make business deposit: Yes
• Driving to office supply store for business: Yes

Listed Property Rules Apply

Vehicles are “listed property” under IRC §280F. This triggers special recordkeeping requirements.

Required contemporaneous records:

1. Mileage for each business trip
2. Date of trip
3. Destination (or route)
4. Business purpose

“Contemporaneous” means: Recorded at or near the time of travel. Reconstructing a log in March for prior-year travel doesn’t meet IRS standards.

Acceptable formats:

• Digital app with GPS tracking (MileIQ, TripLog, Everlance)
• Paper mileage logbook (sold at office supply stores)
• Excel spreadsheet updated weekly
• Google Sheets on smartphone (date/purpose/miles/destination)

Personal use reporting:

If you provide a business vehicle to an employee (or yourself as S-Corp shareholder-employee), personal use is taxable compensation. The employer must report it on W-2.

Two methods to value personal use:

1. Cents-per-mile: 67 cents/mile for 2024 (IRS updates annually)
2. Annual lease value: Based on vehicle FMV (see IRS Publication 15-B)

Example:

S-Corp provides you a $90,000 Escalade. You drive it 20,000 miles (15,000 business, 5,000 personal).

Personal use value:

• 5,000 miles × $0.67 = $3,350 taxable compensation
• Reported on your W-2, increases your taxable wages

You’ll pay income tax and FICA on that $3,350. The S-Corp deducts it as compensation expense.

Recapture Risks

Recapture happens when:

1. Business use drops below 50% before the end of the recovery period (5 years for vehicles)
2. Vehicle is sold or disposed of before the end of the recovery period
3. Vehicle is converted to personal use

What gets recaptured:

Excess depreciation over what you would’ve claimed using the straight-line method without Section 179 or bonus.

Example:

Year 1: Bought $90,000 Escalade, claimed $90,000 Section 179 + bonus depreciation Year 3: Sold for $60,000

Recapture calculation:

• Adjusted basis: $0 ($90,000 cost minus $90,000 depreciation)
• Sale price: $60,000
• Gain: $60,000 ($60,000 sale price minus $0 basis)

Of that $60,000 gain:

• Depreciation recapture (IRC §1245): $60,000 taxed as ordinary income (up to original depreciation taken)
• The entire $60,000 is ordinary income (your marginal rate, not capital gains rate)

Tax impact:

• $60,000 × 37% marginal rate = $22,200 in federal tax
• State tax (varies): +$3,000-6,000
• Net effect: You got an immediate deduction in Year 1, gave back some of it in Year 3 (but not all, you still saved ~$11,000 net)

Recapture is painful if:

• You sell quickly (1-2 years) and haven’t used the tax savings productively
• Sale price is high (minimizes net benefit)
• Income spikes in recapture year (higher marginal rate)

How to avoid recapture:

1. Hold vehicles 3+ years (ideally full 5-year recovery period)
2. Maintain >50% business use annually
3. Plan for recapture tax when selling early (set aside 25-40% of sale proceeds)

Recapture on business use drop:

Example:

Year 1: Bought $75,000 truck, claimed $75,000 deduction (100% business use) Year 2: Business use drops to 40%

Recapture triggered:

• Fell below 50% threshold
• Must recalculate Year 1 depreciation using straight-line (not Section 179/bonus)
• Straight-line Year 1: ~$15,000 (20% × $75,000 under MACRS 5-year)
• Excess depreciation: $60,000 ($75,000 claimed minus $15,000 allowed)
• Recapture: $60,000 ordinary income in Year 2

This is why maintaining business use >50% annually is critical.

Documentation Checklist

Keep these records for audit protection:

•  Purchase invoice showing date vehicle was placed in service
•  Title or bill of sale proving ownership and date of transfer
•  GVWR verification (photo of door jamb sticker or manufacturer spec sheet)
•  Business use log (contemporaneous mileage records with date/purpose/miles)
•  Form 4562 filed with tax return (Section 179 and depreciation election)
•  Asset listing for partnership/S-Corp (capital account tracking, IRS requires beginning and ending basis)
•  Loan documents if financed (verify in-service date matches financing date)

How long to keep:

• Active records: Until statute of limitations expires (typically 3 years from return due date)
• If asset sold: 3 years from year of sale
• If recapture: 3 years from recapture year
• Safe recommendation: 7 years from year of disposal

Audit risk:

Section 179 vehicle deductions trigger IRS scrutiny when:

• High-value vehicles ($80K+) claimed in full
• 100% business use claimed without supporting documentation
• Luxury vehicles (Escalade, Navigator, Range Rover) in service businesses (raises personal use questions)
• Multiple vehicles purchased in same year

We help clients document defensibly: Photo of GVWR sticker, signed business use policy, digital mileage logs, and proper Form 4562 reporting.

For a complete business tax preparation checklist, see our comprehensive guide.

Frequently Asked Questions

Does Section 179 apply to used vehicles?

Yes. Both new and used vehicles qualify for Section 179 as long as:

• The vehicle is new to you (not previously owned by you or a related party)
• It’s used more than 50% for business
• It was purchased for business use (not converted from personal use)

The “new to you” rule prevents gaming. You can’t sell your F-250 to your brother, buy it back, and claim Section 179 again. Related parties include family members, business partners, and entities you control.

Example: You buy a used 2022 Ford F-250 from a dealer in 2025. It has 45,000 miles. As long as you didn’t previously own it and it’s used >50% for business, you can claim full Section 179 treatment (subject to GVWR-based limits).

Doesn’t qualify:

• Vehicle you previously owned personally, now converted to business use
• Vehicle purchased from your spouse, parent, child, or business partner
• Vehicle purchased from an entity you own >50%

Can I write off 100% of a vehicle over 6,000 lbs?

Depends on vehicle type and which deduction method you use.

Yes – 100% deduction possible:

• True commercial vehicles >14,000 lbs GVWR: Section 179 up to $2.5M
• Pickup trucks with 6+ ft cargo bed: Section 179 up to $2.5M (even if <14K lbs)
• Cargo vans with no rear seats: Section 179 up to $2.5M
• Any qualifying vehicle via bonus depreciation: No caps, 100% of cost

No – limited to $31,300 via Section 179:

• Heavy SUVs (6,001-14,000 lbs GVWR) “primarily designed for passenger transport”
• Pickup trucks with <6 ft bed

But you can exceed the $31,300 cap by combining methods:

• Section 179: $31,300 (SUV cap)
• Bonus depreciation: Unlimited (100% of remaining basis)

Example – $90,000 Cadillac Escalade (7,400 lbs GVWR):

• Section 179: $31,300
• Remaining basis: $58,700
• Bonus depreciation (100%): $58,700
• Total year-one deduction: $90,000

So technically, yes, you can write off 100% of a heavy SUV in year one. But you need to use the Section 179 + bonus depreciation combination, not Section 179 alone.

Is there an official IRS list of vehicles over 6,000 pounds?

No. The IRS doesn’t publish a “Section 179 approved vehicle list.” Eligibility is determined by three factors you verify independently:

1. GVWR (Gross Vehicle Weight Rating): Found on the Federal certification label on your vehicle’s driver’s side door jamb. This is the legal weight rating, not curb weight.
2. Vehicle classification:
   • SUV (built on truck chassis, designed for passengers)
   • Pickup truck (measure cargo bed length)
   • Cargo van (check for rear passenger seating)
3. Cargo bed length (for pickup trucks): Measure inside the bed from bulkhead to tailgate. 6+ ft avoids the SUV cap per IRS Notice 2018-59.

Where to get GVWR:

• Driver’s door jamb sticker (Federal certification label)
• Manufacturer website (enter VIN for exact specs)
• Owner’s manual specifications section
• Dealer spec sheet (ask for GVWR, not curb weight)

Why no official list exists:

GVWR varies by:

• Trim level (same model, different configurations)
• Engine choice (diesel adds weight)
• Options (towing package, upgraded suspension)

Example: A 2025 Chevy Suburban can range from 7,100 lbs to 7,400 lbs GVWR depending on configuration. The IRS can’t publish a definitive list when specs vary by VIN.

Our tables above are guides based on typical configurations. Always verify your specific vehicle’s GVWR before relying on Section 179 treatment.

What is the Section 179 limit for SUVs in 2025?

Heavy SUVs (6,001-14,000 lbs GVWR) “primarily designed to carry passengers on public roads” have a Section 179 cap of $31,300 for 2025.

This is an inflation adjustment from $30,500 in 2024. The IRS updates this limit annually via Revenue Procedure (published November-December for the following year).

To exceed the $31,300 limit:

Option 1 – Use bonus depreciation:

• No SUV cap applies
• 100% of cost can be deducted in year one
• Example: $90,000 Escalade = $90,000 bonus depreciation

Option 2 – Combine Section 179 + bonus:

• Section 179: $31,300 (up to SUV cap)
• Bonus depreciation: Remainder (100%)
• Example: $90,000 Escalade = $31,300 (Section 179) + $58,700 (bonus) = $90,000 total

Both achieve the same result. The combined method provides flexibility (you can elect less than $31,300 under Section 179 if desired).

Vehicles that avoid the $31,300 cap entirely:

• Pickup trucks with 6+ ft cargo bed (even if SUV-like)
• Vehicles >14,000 lbs GVWR
• Cargo vans with no rear passenger seating

Example:

• Ford F-250 crew cab, 5.5-ft bed: $31,300 SUV cap (short bed)
• Same truck, 6.75-ft bed: Full expensing up to $2.5M (long bed avoids cap)

How do I verify my vehicle’s GVWR?

Check these sources in order of reliability:

1. Driver’s door jamb (most authoritative):

• Open the driver’s door
• Look at the door jamb (where door latches)
• Find the Federal certification label (required on all vehicles)
• Look for “GVWR” or “Gross Vehicle Weight Rating”
• Listed in pounds (e.g., “GVWR: 10,000 LBS”)

2. Owner’s manual:

• Specifications section (usually near the back)
• Look under “Weights and Capacities” or “Vehicle Specifications”
• GVWR listed for all trim levels

3. Manufacturer website:

• Enter your VIN (17-character vehicle identification number)
• View full specifications for your exact configuration
• Look for “GVWR” or “Gross Vehicle Weight Rating”

4. Vehicle registration:

• Some states print GVWR on title or registration documents
• Texas does not (unfortunately)
• California, Florida, and New York typically do

5. Dealer spec sheet:

• Ask the dealer for a specification sheet for your VIN
• Request GVWR specifically (not curb weight)

Important distinctions:

Example:

• 2025 Cadillac Escalade
• Curb weight: 5,900 lbs
• GVWR: 7,400 lbs
• For Section 179: Use 7,400 lbs (qualifies for $31,300 SUV cap)

Can I combine Section 179 and bonus depreciation?

Yes, on the same vehicle. This is a powerful strategy for maximizing year-one deductions on heavy SUVs that exceed the $31,300 Section 179 cap.

How it works:

1. Claim Section 179 deduction (up to applicable limit)
2. Reduce your basis in the vehicle by the Section 179 amount claimed
3. Apply bonus depreciation to the remaining basis (100% in 2025)

Example – $90,000 Cadillac Escalade (7,400 lbs GVWR):

1. Section 179 deduction: $31,300 (SUV cap)
2. Remaining basis: $58,700 ($90,000 cost minus $31,300 Section 179)
3. Bonus depreciation: $58,700 (100% of remainder)
4. Total first-year deduction: $90,000

Limitations:

• Total deductions can’t exceed vehicle cost (obvious but worth stating)
• Business use percentage applies to both (75% business use = 75% of total deduction)
• Must meet >50% business use for Section 179 to apply

Why combine instead of using bonus alone?

Flexibility. Section 179 is elective (you choose the amount). Bonus depreciation is all-or-nothing unless you formally elect out.

Example of flexibility:

S-Corp owner has limited stock basis ($50,000). Buying a $90,000 Escalade.

Option 1 – Bonus depreciation only:

• $90,000 deduction claimed
• Exceeds basis by $40,000
• $40,000 in suspended losses (can’t use until basis restored)

Option 2 – Combined approach:

• $31,300 Section 179
• $18,700 bonus depreciation (elect to take less)
• Total deduction: $50,000 (matches basis)
• Remaining $40,000 depreciated in future years

The combined approach lets you manage the deduction timing to avoid suspended losses.

What happens if I sell the vehicle before 3 years?

Recapture rules kick in. You’ll pay taxes on depreciation previously deducted.

Recapture triggers:

1. Sold before the end of the recovery period (5 years for vehicles)
2. Business use drops below 50% in any year
3. Converted to personal use

What gets recaptured:

Depreciation deductions taken that exceed what you would’ve claimed under the straight-line method without Section 179/bonus.

Since most businesses use Section 179 or bonus to deduct 100% in year one, you’ve taken far more depreciation than straight-line allows. When you sell, that “excess” gets recaptured as ordinary income (not capital gains).

Example:

Year 1: Purchased $90,000 Escalade, claimed $90,000 deduction (Section 179 + bonus)

• Adjusted basis: $0 ($90,000 cost minus $90,000 depreciation)

Year 2: Sold for $60,000

Tax calculation:

• Sale price: $60,000
• Adjusted basis: $0
• Gain: $60,000
• Depreciation recapture (IRC §1245): $60,000 as ordinary income
• Taxed at your marginal rate (up to 37% federal)

Tax hit:

• Federal: $60,000 × 37% = $22,200
• State: $60,000 × 5-10% = $3,000-6,000
• Total tax: ~$25,200

Net benefit calculation:

• Year 1 tax savings: $90,000 × 37% = $33,300
• Year 2 recapture tax: $25,200
• Net tax benefit: $8,100 (saved $33,300, gave back $25,200)

You still came out ahead, but it’s less beneficial than holding longer.

If you held 5+ years:

• Adjusted basis still $0 (already fully depreciated)
• Sale price (assume): $35,000 (more depreciation after 5 years)
• Gain: $35,000
• Recapture: $35,000 as ordinary income
• Tax: ~$12,950
• Net tax benefit: $20,350 (much better)

Strategy to minimize recapture pain:

1. Hold 3+ years minimum (preferably 5+ years, full recovery period)
2. Plan for recapture tax when selling early (set aside 25-40% of sale proceeds for taxes)
3. Consider trading in instead of selling (can defer some gain in certain structures)
4. Maintain business use >50% annually (avoids triggering recapture on use change)

Does Tesla Model X qualify for Section 179?

Depends on your specific Model X configuration. GVWR varies by trim, battery, and model year.

Older Model X (2020-2022):

• Some configurations: 6,000-6,250 lbs GVWR
• If GVWR >6,000 lbs: $31,300 Section 179 cap (heavy SUV limit)
• If GVWR <6,000 lbs: $20,400 luxury auto limit
• Check your door jamb sticker for exact GVWR

Current Model X (2023-2026):

• Most trims: 6,100-6,300 lbs GVWR
• Qualifies for: $31,300 Section 179 cap (heavy SUV treatment)
• Can also use: Bonus depreciation for full expensing (no cap)

Example – 2025 Model X Plaid ($100,000 GVWR: 6,250 lbs):

Section 179 only:

• $31,300 deduction (SUV cap)

Bonus depreciation only:

• $100,000 deduction (no cap)

Combined (optimal):

• Section 179: $31,300
• Bonus depreciation: $68,700
• Total: $100,000 year-one deduction

EV tax credit consideration:

Tesla Model X may qualify for the federal EV tax credit (IRC §30D, up to $7,500) if:

• MSRP <$80,000 (disqualifies most Model X trims)
• Purchased new (not used)
• Buyer’s income below limits

If you qualify for the EV credit, it reduces your tax directly (not your vehicle’s depreciable basis). You can stack Section 179/bonus depreciation AND the EV credit.

But: Taking the EV credit reduces your cost basis for depreciation purposes.

Example:

• Model X cost: $100,000
• EV credit claimed: $7,500
• Depreciable basis: $92,500 ($100,000 minus $7,500)
• Section 179/bonus: $92,500 max

Verify your specific Model X GVWR:

• Check driver’s door jamb sticker (most reliable)
• Tesla website: Enter VIN for exact specs
• Owner’s manual specs section

How SDO CPA Helps Maximize Your Section 179 Vehicle Deduction

We’ve handled hundreds of Section 179 vehicle deductions across partnerships, S-Corps, and LLCs. We know the nuances most CPAs miss: pickup truck bed length exceptions, SUV cap workarounds, bonus depreciation coordination, recapture planning.

Services we provide:

1. Pre-purchase analysis Should you buy in Q4 2025 or wait until 2026? We model:

• Current vs. projected income (higher income = more valuable deduction)
• 2025 tax law benefits (100% bonus depreciation might not last)
• Cash flow timing (year-end vs. Q1 dealer incentives)
• Entity ownership structure (company vs. personal, which gets the deduction)

2. Section 179 vs. bonus depreciation optimization For every vehicle purchase, we calculate:

• Section 179-only scenario
• Bonus depreciation-only scenario
• Combined strategy (usually optimal for heavy SUVs)
• Multi-year tax impact modeling

Example: Client buying a $95,000 Range Rover. We modeled S-Corp basis limitations and recommended $31,300 Section 179 + $63,700 bonus to avoid suspended losses while maximizing year-one deduction.

3. Entity structuring Who should own the vehicle?

• S-Corp (company ownership, fringe benefit rules apply)
• Partnership (flexibility in allocations)
• Personal (lease to business, mileage deduction)
• LLC (check-the-box election impacts treatment)

We analyze which structure provides the best tax result based on your ownership, basis, and personal use.

4. Documentation review We ensure you meet IRS substantiation requirements:

• GVWR verification (we request door jamb photo)
• Business use logs (we provide templates)
• Form 4562 preparation (Section 179 election, basis tracking)
• Asset listing for K-1 reporting (partnerships/S-Corps)

5. Multi-year planning Section 179 vehicle purchases have multi-year impacts:

• Recapture risk if sold early
• Basis tracking for partners/shareholders
• Future depreciation if deduction limited in year one
• State tax conformity (some states don’t follow federal Section 179 limits)

Real client outcomes:

Partnership Fleet Purchase:

Construction partnership purchased three Ford F-350s in December 2024 ($240,000 total). We structured:

• Section 179: $72,000 ($24,000 per truck, under $30,500 2024 cap)
• Bonus depreciation (60% in 2024): $100,800
• Total year-one deduction: $172,800
• Tax savings: ~$58,000 (federal + Texas margin tax)

Alternative if they’d waited until 2025:

• Section 179: $93,900 ($31,300 × 3 trucks, 2025 cap)
• Bonus depreciation (100%): $146,100
• Total year-one deduction: $240,000

Buying in 2024 vs. 2025 cost them $67,200 in deductions (~$22,000 in tax savings). But their 2024 income was significantly higher (project windfall). We analyzed and recommended December 2024 purchase. Net result: $36,000 more in tax savings despite lower depreciation percentages.

S-Corp Company Car Restructure:

Client had been using personal Suburban for business, deducting mileage (67 cents/mile). Average deduction: $12,000/year.

We restructured:

• S-Corp purchased Suburban ($75,000)
• Section 179 + bonus: $75,000 year-one deduction
• Client paid tax on personal use (20% = $15,000 × 20% = $3,000 taxable wages)

Result:

• Year 1 tax savings: $75,000 × 32% = $24,000
• Cost of personal use tax: $3,000 × 32% = $960
• Net year-one benefit: $23,040 (vs. $12,000 under mileage method)
• Improvement: $11,040 in additional tax savings

Ongoing years: Client saves ~$5,000 annually by having S-Corp cover all vehicle costs (insurance, maintenance, gas) vs. mileage method.

Multi-Entity Vehicle Allocation:

Client with three entities:

• Operating LLC (high income, needs deductions)
• Holding company S-Corp (low income, basis limitations)
• Real estate partnership (passive income)

Purchased: $90,000 Escalade

We allocated:

• Operating LLC purchases vehicle
• LLC deducts full $90,000 (offsets active income)
• LLC leases vehicle to holding company for business use (generates income to offset other deductions)

Net effect: Deduction placed where most valuable, no basis issues, clean paper trail for IRS.

Why SDO CPA:

You’ll talk directly to a CPA with Big Four experience (EY, KPMG), not a tax preparer reading from a script. We specialize in pass-through entities (partnerships, S-Corps) where Section 179 vehicle deductions interact with basis limitations, QBI calculations, and multi-state allocations.

We don’t just “do your taxes.” We analyze your specific situation and recommend the optimal structure. Our average client saves $47,000 annually vs. their prior CPA through proactive planning like this.

Year-End Vehicle Purchase Consultation

Planning a business vehicle purchase before December 31? Schedule a consultation to analyze:

• Section 179 vs. bonus depreciation optimization
• Entity ownership structuring (company vs. personal)
• Multi-year tax impact modeling
• Q4 2025 vs. Q1 2026 timing decision

Schedule Consultation

For more on our tax planning approach, visit our strategic tax planning services.

2027 Outlook: What to Expect for Section 179 Vehicle Deductions

2026 confirmed limits (IRS Revenue Procedure 2025-32):

Source: IRS Revenue Procedure 2025-32 (published October 9, 2025)

Legislative risks to watch:

1. Tax Cuts and Jobs Act provisions sunset December 31, 2025 (NOW PASSED)

Many TCJA provisions expired at year-end 2025. Section 179 and bonus depreciation survived intact due to the One Big Beautiful Bill Act, which made the enhanced Section 179 limits permanent (subject to annual inflation adjustments).

2. Bonus depreciation phase-down risk for 2027+

The One Big Beautiful Bill Act restored 100% bonus depreciation through 2026. The scheduled phase-down could resume starting 2027:

• 2026: 100% (confirmed)
• 2027: Potentially 80% (unless extended)
• 2028: Potentially 60%
• 2029: Potentially 40%
• 2030: Potentially 20%
• 2031: Potentially 0%

Congress could extend 100% beyond 2026, accelerate the phase-down, or make it permanent. Watch for legislation in late 2026.

3. Electric vehicle incentive changes

IRC §30D (EV tax credit) has income limits, MSRP caps, and domestic manufacturing requirements. These change frequently based on political priorities.

Current:

• Up to $7,500 credit for new EVs
• MSRP cap: $80,000 for SUVs, $55,000 for cars
• Income limits: $300K (joint), $150K (single)

Potential changes:

• Expands to more vehicles (removes domestic manufacturing requirements)
• Reduces credit amounts
• Tightens eligibility

How this interacts with Section 179: The EV credit reduces your depreciable basis. Bigger credit = smaller Section 179/bonus deduction.

4. State tax conformity issues

Some states don’t conform to federal Section 179 limits:

If you operate in multiple states, you’ll need state-specific adjustments on your returns. California and New York are particularly restrictive.

Our 2026-2027 recommendations:

If you’re considering a business vehicle purchase in 2026:

1. Take advantage of 2026’s increased limits – Section 179 cap is now $2.56M (up from $2.5M in 2025), and the heavy SUV cap increased to $32,000.
2. 100% bonus depreciation is confirmed through 2026 – This is the most favorable treatment since 2017. Don’t wait.
3. Consult a CPA before year-end if the purchase exceeds $50,000. The entity structure and timing decision can swing tax savings by $5,000-15,000.

If you’re planning 2027 purchases:

1. Monitor 2027 Section 179 limit announcements (IRS publishes Revenue Procedure in November-December 2026)
2. Watch for bonus depreciation legislation – 100% is secure through 2026, but 2027+ could see phase-down resume
3. Consider accelerating to 2026 if you anticipate bonus depreciation reduction in 2027

For year-end planning strategies beyond vehicles, see our comprehensive tax planning guide.

Ready to Maximize Your Vehicle Deduction?

Section 179 and bonus depreciation provide powerful first-year write-offs for business vehicles. But the rules are complex: GVWR thresholds, SUV caps, bed length exceptions, recapture risks, and entity structuring decisions.

Key takeaways:

• Heavy SUVs (6,001-14,000 lbs): $32,000 Section 179 cap (2026), but unlimited via bonus depreciation
• True commercial vehicles (>14,000 lbs or cargo-only): Full expensing up to $2.56M (2026)
• Pickup trucks with 6+ ft beds: Avoid SUV cap, full expensing eligible
• Luxury autos (<6,000 lbs): $20,400 first-year limit (Section 179 + bonus combined)
• Combine Section 179 + bonus depreciation for maximum write-off on heavy SUVs

Next steps:

1. Verify your vehicle’s GVWR (driver’s door jamb sticker)
2. Calculate business use percentage (must exceed 50%)
3. Determine which deduction tier applies (use our tables above)
4. Consult with a CPA before purchase if exceeding $50,000

Internal resources:

• Tax Planning Services – Year-round strategic planning
• S-Corporation Tax Guide – Company car strategies, reasonable compensation
• Partnership Tax Services – Vehicle allocation, basis tracking
• Business Tax Deductions Guide – Comprehensive deduction overview
• Small Business Tax Preparation Checklist – Documentation requirements

Schedule a Section 179 Vehicle Consultation

SDO CPA specializes in strategic tax planning for partnerships, S-Corps, and complex business situations. We’ve handled hundreds of Section 179 vehicle deductions and know how to structure purchases for maximum tax benefit.

Schedule a consultation to analyze:

• Section 179 vs. bonus depreciation optimization for your specific vehicle
• Entity ownership structuring (company vs. personal, which gets the deduction)
• Multi-year tax impact modeling (including recapture planning)
• Q4 2025 vs. Q1 2026 timing decision based on your income projections

Book Your Consultation

This article provides general tax information. Section 179 and bonus depreciation rules are complex and vary based on individual circumstances. Consult with a qualified CPA before making vehicle purchase decisions based on tax benefits.