Write off your vehicle and deduct it from your income

It's because of this:

Every year most business owners are leaving tens of thousands of dollars in deductions on the table because they buy a vehicle for their business and claim 5-year depreciation without maximizing the single greatest tax deduction available to them.

Instead, smart business owners are deducting $31,300 (or more) in one tax year, even on vehicles they were going to buy anyway. What's the difference? They understand Section 179. Thanks to the One Big Beautiful Bill Act, which went into effect on July 4, 2025, this deduction is more powerful than ever. Here's what that means.

What You'll Learn

• What Changed in 2025 (The Big News)

• How Section 179 Actually Works

• The 6,000-Pound Rule Explained

• Which Vehicles Qualify (Complete List)

• Real-World Math: What You'll Actually Save

• 5 Costly Mistakes to Avoid

• The Smart Business Owner's Strategy

What Changed in 2025: The Numbers That Matter

The One Big Beautiful Bill Act didn't just update Section 179. It overhauled it. Here are the old and new numbers:

• $2.5M New Maximum Deduction (Up from $1.25M)

• $4M Phase-Out Threshold (Up from $3.05M)

• 100% Bonus Depreciation (Restored from 60%)

• $31,300 SUV Deduction Cap (For vehicles 6,000+ lbs)

Of all the numbers above, the most important is the last one: $31,300. That's the maximum Section 179 deduction for heavy SUVs in 2025.

The Real Opportunity

For vehicles used 100% for business, you can stack the Section 179 deduction on top of bonus depreciation and potentially write off the full purchase price in year one. Even the $75,000 SUV may end up with zero net deprecation after just one year.

What is Section 179? (In Simple Terms)

Section 179 of the IRS tax code allows businesses to deduct the full amount of a business equipment purchase (including vehicles) on their taxes in the first year the equipment is put into service. Normally this type of purchase would be expensed over 5-7 years as a capital asset.

So, what does this mean for your cash flow?

Actual Depreciation: Same $60,000 SUV, claim a write-off of about $12,000 a year for five years.

Section 179: Same $60,000 SUV, same deduction: up to $31,300 this year, plus bonus depreciation on the balance.

In either scenario, the tax savings goes into your pocket immediately even if you finance the vehicle. Yes, you can finance the vehicle and deduct it in full.

Critical Requirement

The car must be used for business more than 50% of the time. If you use it for business less often, you can only deduct that percentage. So if you use it for business 70% of the time, you can only deduct 70% of the allowed amount. Make sure you keep accurate mileage records.

The 6,000-Pound Rule: Why Weight Matters

The IRS differentiates vehicles by Gross Vehicle Weight Rating (GVWR), not curb weight, not what the scale shows, but the maximum loaded weight the manufacturer assigns to the vehicle.

So, why does this matter?

2025 Max First-Year Deduction by Vehicle Category

• Passenger vehicles under 6,000 lbs GVWR: $20,200 (combined Section 179 + bonus)

• SUVs over 6,000 lbs GVWR: $31,300 Section 179 cap + bonus depreciation on remainder

• Trucks/Vans over 6,000 lbs (non-SUV): No cap—full purchase price eligible

In other words, if you're planning to buy a vehicle for business use in the first place, it might be worth the extra 11,000 in first-year deductions to make sure it weighs over 6,000 pounds.

What To Look For

GVWR (Gross Vehicle Weight Rating): Located on a sticker on the driver side door jamb, this is the max weight your vehicle can carry, including fuel, passengers, etc. DO NOT go by curb weight or what the sales person says.

Qualifying Vehicles: Full List (2026)

Here are the most common SUV's and Crossover's with a GVWR over 6,000 lbs. This is not an all-inclusive list, rather a list of what business owners typically purchase:

Luxury SUVs (All Over 6,000 lbs GVWR)

Full-Size SUVs (The Workhorses)

Mid-Size SUVs That Qualify (Check Trim Levels)

Note: Some models hover right at 6,000 lbs. Always verify GVWR on the door sticker of the specific vehicle you're purchasing—different trim levels and packages can push weight above or below the threshold.

Real-World Math: What You'll Actually Save

Let's run the numbers on a realistic scenario:

📊 Example: 2025 Chevrolet Tahoe High Country

Purchase Price$82,000

Business Use Percentage100%

Section 179 Deduction$31,300

Remaining Basis$50,700

Bonus Depreciation (100%)$50,700

Total First-Year Write-Off$82,000

Assuming a combined federal/state tax rate of 35%, that $82,000 deduction equates to about $28,700 in taxes saved in the first year alone.

Now let's say you financed the car. Perhaps you put 15k down and your monthly payments are 1400. At the end of the year, you would have paid 25k on the car but you're deducting 82k on your taxes. Your tax deduction is greater than what you've actually paid in cash.

The Strategic Play

Most savvy business owners will plan their vehicle purchases to maximize this deduction. If you buy and place the vehicle in service by December 31, 2025, you can deduct the full amount even if you finance 100% of the purchase. The IRS is concerned with when you place the vehicle in service, not when you pay it off.

5 Costly Mistakes to Avoid

Mistake #1: GVWR vs. Curb Weight

Here's the first thing you're getting wrong: GVWR vs. Curb Weight. Curb weight: the weight of the vehicle when it's empty. GVWR: the maximum weight of the vehicle when it is fully loaded. The IRS uses GVWR to determine your vehicle deduction. A vehicle that has a curb weight of 5,500 lbs could have a GVWR of 6,500 lbs—and that extra weight means more than $11,000 in additional deductions.

Mistake #2: Lack of records

If you're audited by the IRS and you can't substantiate business use, you'll lose the deduction. Keep a mileage log. Get an app. Document every business trip. The onus is on you to keep records.

Mistake #3: Going over net taxable income for your business

The total amount of Section 179 deductions may not exceed your net taxable income for your business. If your net taxable income is $200,000 and you try to deduct $250,000 in equipment, you will not qualify. You can roll the unused amount forward, but it may delay the immediate tax relief you're looking for.

Mistake #4: Missing the Deadline

The car must be purchased and placed in service by December 31. Placed in service means ready for use. Ordered in December, but it's delivered in January? That's a 2026 deduction.

Mistake #5: Ignoring State Rules

Your state may not follow all of the federal Section 179 guidelines. For instance, California has historically set their maximum deduction levels much lower than the Federal levels. Check with your state to see what guidelines they follow. If you do not, you could be in for a shock come tax time.

What Smart Business Owners Are Doing

What business owners do to take advantage of Section 179:

• Co-ordinate your purchases with your tax situation. In a good year, consider buying more. In a bad year, consider buying next year so that you have the cash to pay for the taxes.

• Co-ordinate with bonus depreciation. Sec 179 is limited, but bonus depreciation is not, for those vehicles that qualify.

• Consider financing. You still get the deduction even if you finance. The tax savings can sometimes dwarf the loan payments.

• Keep records. Keep a mileage log. Save your receipts. Have a record of how the vehicle is used. Assume that you will be audited.

• Consider consulting with a qualified tax professional (CPA). A good one will save you money many times over on decisions like this one. Don't go this alone.

Building or Selling a Business?

Learning how to minimize your tax liability is just one of many considerations when it comes to building the value of your business. If you are buying or selling a business, or are just curious about your options, contact us to start the conversation.

Disclaimer

Please note that this article is for educational and informative purposes only, and should not be considered tax advice. Always consult with a qualified tax advisor to discuss your individual circumstances.

The Bottom Line

Section 179 is not a loophole it is a tax incentive for business investment that was made even more valuable by the One Big Beautiful Bill Act in 2025.

So if you're an entrepreneur with a business, if you don't know this, you're missing out on a ton of money. A large SUV used for business can net you $25,000-$35,000+ in first-year tax savings.

There is no creative accounting. There is only an understanding of the rules, and their proper application.

So it's not a question of whether Section 179 works, but will you use it before the end of the year on December 31?