Save On Commercial Vehicles with Section 179
Don't wait to upgrade your business! With Section 179, you can get the vehicle you need and deduct the purchase price next tax season. At DeMontrond Chrysler Dodge Jeep Ram, we have great vehicles suitable for all your commercial needs and a team of experts to help you get the most from your hard-earned money. Search for your next business-use vehicle today and learn more about how Section 179 can help you reduce costs for important upgrades you need now. Contact our team today to learn more about our qualifying vehicles.
What Is Section 179?
Section 179 is a part of the IRS tax code that allows small to medium businesses to deduct expenses for equipment. Yes, that includes vehicles and other business-use items like furniture or software. There are deduction limits for the year to ensure it remains a small to medium business benefit.
How Section 179 Tax Deductions Work
With Section 179, you can deduct up to the full purchase price for the current tax year when the vehicle is placed into service. The amount depends on the vehicle type, use, and configuration, with caps on the total amount allowed for deductions. If you are a small business, the caps can go a long way to cover expenses for business equipment and help small to medium businesses make the investments they need to grow.
Annual Deduction Limits
The annual deduction limit for businesses in 2024 is $1,220,000, a $60,000 increase from last year.
Annual Spending Cap
The total equipment purchase limit for 2024 is $3,050,000, a $160,000 increase from last year.
Bonus Depreciation
Bonus Depreciation is still in effect at 60 percent in 2024. The IRS is sunsetting bonus depreciation, which will be phased out by 20 percent each year until it expires on December 31, 2026.
Which Vehicles Qualify for Section 179 Tax Deductions
Any of our vehicles at DeMontrond Chrysler Dodge Jeep Ram can qualify for a Section 179 tax deduction. From heavy-duty work trucks to stunning passenger vehicles designed to impress, you can take your business to the next level with an incredible vehicle. New and used vehicles in our inventory are eligible, as well as specialized vehicles for specific commercial purposes. The amount of the deduction varies from the full purchase price to a partial deduction, and the amount you can deduct depends on the following factors:
- Percentage of Business-Use - Must be at least 50 percent
- Purpose and style of the vehicle
- Type of vehicle
- Vehicle weight - vehicles less than 6,000 pounds typically only qualify for a partial deduction unless modified for a specific work purpose and can't double as a personal vehicle.
Frequently Asked Questions
Questions about how to leverage Section 179 tax deductions for your business? Our experts at DeMontrond Chrysler Dodge Jeep Ram answer our frequently asked questions and are available to help you navigate applicable deductions and savings for your next business-use vehicle.
Yes, any equipment, including new and used vehicles that are used for business purposes at least 50 percent of the time, qualify for Section 179 deductions.
Yes, non-tax capital leased vehicles qualify for Section 179 as long as they meet the business-use requirements.
Yes, as long as the vehicles are used for business purposes at least 50 percent of the time, they can double as personal vehicles.
A Section 179 deduction should be taken for the tax year it was purchased and placed in use. There is no grandfathering for vehicles purchased in previous years, and you can’t claim future purchases.
The IRS does not give a specific required time for keeping the vehicle, but the vehicle must remain at least 50 percent business use while the business owns it or risk Section 179 recapture. If you allow the business use to fall below 50 percent or sell the vehicle, you may owe the difference. Please be sure to speak with your tax advisor for more information about Section 179 deductions and how the requirements could impact your business.
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