Section 179 is a special deduction that allows you to write off any equipment in the year it was purchased. The tax code was permanently expanded in 2015 legislation.
What is the Section 179 deduction?
The Section 179 deduction allows a business to deduct the full price or up to $500,000 of depreciable assets in the year of purchase. This mainly includes office furniture and fixtures, software, machinery, heavy equipment and heavy vehicles such as trucks and SUVs. The most popular use of Section 179 deductions is for vehicles. In the past, the Section 179 deduction was also known as the “Hummer tax loophole” because at the time the deduction allowed businesses to buy an SUV and then write it off. The tax code has since been amended; however, the Section 179 deduction is still beneficial to businesses when purchasing a vehicle. However, in addition to the $500,000 limit, Section 179 has some limitations. For example, if you purchase assets worth more than $2,000,000 in a given year, the deduction will be phased out. Also, your business should have positive income rather than loss during the year. If you can meet these criteria, it may be worthwhile to move next year’s vehicle purchase to now to benefit from the tax savings. However, the Cadillac Escalade Gross Vehicle Weight must be low and purchased by the 31st of the year to write off the tax for a particular year.
How does the Section 179 deduction benefit a business?
This deduction was created to help businesses by allowing businesses to deduct the full cost of equipment (within certain limits), which is a great incentive for businesses to buy, lease, or finance equipment. Deductions apply to most general purpose equipment used in business as well as off-the-shelf software (you can view eligible equipment here). Section 179 for Cadillac Escalade deductions can help your business bottom line by reducing the amount you pay for equipment, vehicles, and more. The Section 179 deduction is very simple to use. You just need to buy or lease equipment or vehicles and use the IRS form
Which vehicles are eligible for the full Section 179 deduction?
Because vehicles can be used for both business and personal purposes, the commercial vehicle deduction is always changing and can be quite complicated. It is much easier to list vehicles that are generally eligible for the full deduction under Section 179. Many vehicles used for work cannot be used for personal purposes by their nature and are always eligible for the full deduction under Section 179. The following vehicles fall into this category:
- Vehicles that can accommodate 9 or more passengers behind the driver’s seat, such as airport shuttles, hotel vans, etc.
- Vehicles with the following characteristics:
- Fully enclosed cab or cargo area.
- There is no seating area at all behind the driver’s seat.
- No part of the bodywork protrudes more than 30 inches in front of the leading edge of the windshield, the van.
- Heavy construction equipment, forklifts and other similar equipment vehicles.
- road tractor trailer
Passenger Car Restrictions for Business Use
For trucks, vans, and passenger vehicles that are more than 50% used for eligible business use, the total deduction, including the Section 179 deduction and bonus depreciation, is limited to $11,560 for vans and trucks and $11,160 for automobiles. Exceptions include the following:
A hearse and ambulance specifically for your business
Transport vans, taxis and other vehicles specially designed to transport people or rent. Non-personal use vehicles specially modified for commercial use, such as work vehicles with permanent racks installed, without any seat behind the driver, and with the company name painted on the exterior. Any other non-SUV heavy-duty vehicles and trucks with a cargo area of at least 6 feet in interior length that is not easily accessible from the passenger area. For example, pickups with a full-size bed are eligible for the full deduction under Section 179 (extension pickups with a small-size bed are not)
List of Vehicles Eligible for Section 179 Deductions
Below is a list of vehicles with a gross loaded weight greater than 6,000 pounds that are eligible for Section 179 deductions. We’ve tried to make the list as exhaustive as possible; however, you can check the car manufacturer’s website to determine the vehicle’s weight, or you can look inside the driver’s door to verify the vehicle’s GVW rating.
- Audi Audit Q7 3.0T Premium
- Audi Q7 3.0L TDI
- BMW X5 M
- BMW X5 XDrive351
- BMW X6 M
- BMW X6 XDrive351
- Buick Enclave 2WD
- Buick Enclave 4WD
- Cadillac Escalade 2WD
- Cadillac Escalade 4WD
- Cadillac Escalade ESV
- Chevrolet Express 2500
- Chevrolet Express 3500
- Chevrolet Silverado C1500
- Chevrolet Silverado C2500
- Chevrolet Silverado C3500
- Chevrolet Silverado K1500
- Chevrolet Silverado K2500
- Chevrolet Silverado K3500
- Chevrolet Silverado 2500HD
- Chevrolet Silverado 3500HD
- Chevrolet Suburban C1500
- Chevrolet Suburban K1500
- Chevrolet Truck Tahoe 2WD LS
- Chevrolet Truck Tahoe 4WD LS
- Chevrolet Truck Tahoe Hybrid