Section 179 Tax Benefit

Deduct up to $30,500

If your business requires vehicles for its day-to-day operations, then you’re in luck! The Section 179 Tax Benefit allows you to recoup the full or partial cost of qualifying new or pre-owned vehicles. Businesses of all sizes can now use the Section 179 Tax Benefit— but you cannot claim the benefit unless the vehicle you’ve purchased meets strict qualifications, or is used for business purposes at least 50% of the time. Let’s take a closer look at what this means in practice.

You May Qualify If You:

• Are a business that purchased or financed qualifying new or used business equipment during the 2024 tax year.
• Put the equipment into service between January 1, 2024, and December 31, 2024.
• Used this equipment for business purposes more than 50% of the time.
• Spent less than $2,890,000 on this equipment.

What is the Section 179 Tax Benefit?

Businesses need to spend in order to grow, and the Section 179 Tax Benefit was designed to make it easier for small and medium-sized businesses to expand their operations. Today, however, businesses of all sizes can benefit from this tax reduction program.

In essence, the benefit allows businesses to claim a tax reduction of up to $1,220,000— depending on the number and type of vehicles that have been purchased. Keep in mind that while this number holds true for tax-year 2024, it varies from year to year.

As we mentioned from the outset, any vehicle that is used for business purposes at least 50% of the time can be qualified as a commercial vehicle. With that said, you don’t necessarily have to calculate the usage of your vehicle in order to qualify. That’s because the following options are automatically classed as commercial vehicles for tax purposes:

• Vehicles that can seat more than nine passengers
• Vehicles with a fully-enclosed driver’s compartment, and a cargo area without seating behind the driver’s seat
• Heavy, non-SUV vehicles that have a cargo area with a minimum length of 6 feet
• Taxis and other transportation vehicles
• Hearses and ambulances
• Vehicles that have been customized or upfitted for business purposes

Remember, this list is designed to get you started! It isn’t a substitute for the advice of a financial professional. If you have questions about qualifying for the Section 179 Tax Benefit, we encourage you to reach out to our team.