Can I write off a vehicle under Section 179?

Yes. Vehicles over 6,000 lbs GVWR (like Chevrolet Tahoe, Ford Expedition, GMC Yukon, Mercedes GLS, BMW X7, Cadillac Escalade) can be deducted up to $28,900 under Section 179 for SUVs, with additional bonus depreciation on the remainder. Pickup trucks and vans have no SUV cap. Vehicles under 6,000 lbs are limited to $12,400 in year 1 ($20,400 with bonus depreciation).

What qualifies for Section 179 deduction?

Qualifying property includes tangible personal property used for business: equipment, machinery, computers, office furniture, software, vehicles (with limits), and qualified improvement property (roofs, HVAC, fire protection, alarm systems on nonresidential buildings). The property must be purchased and placed in service during the tax year and used more than 50% for business.

What is the difference between Section 179 and bonus depreciation?

Section 179 is elective (you choose per asset), has a $1,220,000 cap, and cannot create a business loss. Bonus depreciation is automatic for all eligible assets in a class, has no dollar cap, and CAN create a loss. In 2025, bonus depreciation is 40% (phasing down from 100% in 2022). Use Section 179 first up to your income, then bonus depreciation on the remainder.

Can I use Section 179 if I have a loss?

No. Section 179 deductions cannot create or increase a business loss. The deduction is limited to your taxable business income. However, unused Section 179 deductions carry forward to future years. If you need to create a loss, bonus depreciation has no income limitation and can generate a net operating loss.

Section 179 Deduction 2025: Write Off Equipment, Vehicles, and Software Instantly

Q: What is the Section 179 deduction limit for 2025?

The Section 179 deduction limit for 2025 is $1,220,000. This means you can deduct up to $1,220,000 of qualifying business equipment, vehicles, and software in the year you purchase it instead of depreciating it over multiple years. The deduction begins to phase out dollar-for-dollar when total equipment purchases exceed $3,050,000.

Section 179 lets you deduct the full cost of business equipment in the year you buy it — up to $1,220,000. Here's what qualifies, the vehicle rules, and how to maximize it.

Section 179 of the Internal Revenue Code allows business owners to deduct the full purchase price of qualifying equipment and software in the year it is placed in service, rather than depreciating it over 5-7 years. For 2025, the maximum deduction is $1,220,000. This means a business owner who buys a $65,000 vehicle, $30,000 in equipment, and $5,000 in software can potentially deduct the entire $100,000 in year one instead of waiting years to recover the cost.

This is one of the most powerful — and most misunderstood — deductions in the tax code. Most business owners know Section 179 exists but underuse it because they don't understand the vehicle rules, the SUV cap, or how it interacts with bonus depreciation.

What is the Section 179 deduction limit for 2025?

The Section 179 deduction limit for 2025 is $1,220,000. You can deduct up to this amount for qualifying business property placed in service during the tax year. The deduction begins to phase out dollar-for-dollar when your total equipment purchases exceed $3,050,000, and is completely eliminated at $4,270,000. For most small and mid-size businesses, the full deduction is available.

Year	Section 179 Limit	Phase-Out Begins	Bonus Depreciation Rate
2022	$1,080,000	$2,700,000	100%
2023	$1,160,000	$2,890,000	80%
2024	$1,220,000	$3,050,000	60%
2025	$1,220,000	$3,050,000	40%
2026	~$1,250,000 (est.)	~$3,130,000	20%
2027+	Indexed	Indexed	0%

Critical timing: Bonus depreciation is phasing down 20% per year. In 2025 it is 40%. By 2027 it drops to 0%. If you are planning a large equipment or vehicle purchase, doing it sooner means a larger first-year write-off.

What qualifies for Section 179 in 2025?

Qualifying property under Section 179 includes any tangible personal property purchased and placed in service for business use during the tax year. The property must be used more than 50% for business purposes. If business use drops below 50% in a later year, you must recapture the excess depreciation.

Qualifies	Does NOT Qualify
Equipment and machinery	Real property (buildings, land)
Computers, monitors, peripherals	Inventory or property held for sale
Office furniture and fixtures	Air conditioning or heating units (residential)
Business vehicles (with limits)	Property used outside the US
Off-the-shelf software	Property acquired from related party
Qualified improvement property (QIP)	Gifts or inherited property
Roofs, HVAC, fire protection, alarms	Property used 50% or less for business

How does the Section 179 vehicle deduction work?

Vehicle deductions under Section 179 depend on the vehicle's Gross Vehicle Weight Rating (GVWR). Vehicles over 6,000 lbs GVWR qualify for significantly larger deductions because they are exempt from the luxury automobile limits under IRC section 280F. This is why you see business owners purchasing Tahoes, Suburbans, and Escalades — the tax benefit is real and substantial.

Heavy vehicles (6,000+ lbs GVWR) — the big write-off

Vehicle Type	Section 179	Bonus Depreciation (40%)	Total Year 1
SUV (Tahoe, Escalade, GLS, X7)	$28,900 (SUV cap)	40% of remaining cost	$28,900 + bonus
Pickup truck (F-150, RAM 2500)	Full cost (no SUV cap)	40% of remaining	Up to full cost
Van (Sprinter, Transit)	Full cost (no SUV cap)	40% of remaining	Up to full cost

Example: You buy a $72,000 Chevrolet Tahoe for business use. Section 179: $28,900. Bonus depreciation on remaining $43,100 at 40%: $17,240. Regular depreciation: ~$5,000. Total year 1 deduction: ~$51,140. At a 35% tax bracket, that saves you $17,899 in taxes in the first year.

Regular vehicles (under 6,000 lbs) — limited deductions

Year	Without Bonus Depreciation	With Bonus Depreciation
Year 1	$12,400	$20,400
Year 2	$19,800	$19,800
Year 3	$11,900	$11,900
Year 4+	$7,160/year	$7,160/year

Qualifying heavy vehicles (common models)

Always verify GVWR on the manufacturer specs or door sticker before purchasing:

Full-size SUVs: Chevrolet Tahoe, Chevrolet Suburban, GMC Yukon, Ford Expedition, Toyota Sequoia, Cadillac Escalade, Lincoln Navigator
Luxury SUVs: Mercedes GLS, BMW X7, Range Rover, Lexus LX, Infiniti QX80
Full-size pickups: Ford F-150 (certain trims), F-250/350, RAM 2500/3500, Chevrolet Silverado 2500/3500, GMC Sierra 2500/3500
Vans: Mercedes Sprinter, Ford Transit, RAM ProMaster

Section 179 vs bonus depreciation: which should you use?

Section 179 and bonus depreciation both allow accelerated write-offs, but they work differently. The optimal strategy is to use Section 179 first (up to your business income), then apply bonus depreciation on remaining eligible property.

Feature	Section 179	Bonus Depreciation
Dollar limit	$1,220,000 (2025)	No limit
Income limitation	Cannot exceed business income	No income limit — can create a loss
Can create a loss?	No	Yes
Elective?	Yes — choose per asset	Automatic per asset class (opt out per class)
2025 rate	100% (up to limit)	40% (phasing down)
Carryforward	Yes — unused amount carries forward	N/A
SUV cap	$28,900	No special SUV cap
Used property	Qualifies	Qualifies (post-TCJA)

Strategy: Use Section 179 for assets you want precise control over (choose exactly how much to deduct per asset). Use bonus depreciation for everything else. If you need to generate a loss (to offset W-2 or other income), bonus depreciation is the only option — Section 179 cannot create a loss.

How to maximize your Section 179 deduction

Time your purchases. Buy and place equipment in service before December 31 to claim the deduction for the current tax year. "Placed in service" means ready and available for use — not just ordered.
Combine with home office. Establishing a home office (IRC section 280A) makes your home your principal place of business. All driving from home becomes deductible business mileage, and any vehicle purchased for business use qualifies for higher deductions.
Document business use percentage. If an asset is used 75% for business and 25% personal, you can only deduct 75% of the cost. Keep a mileage log for vehicles and usage records for equipment. The IRS requires contemporaneous records.
Consider the SUV cap workaround. If you need a heavy vehicle, pickup trucks and vans have no $28,900 SUV cap — only SUVs are limited. A Ford F-150 or Mercedes Sprinter can be fully deducted under Section 179.
Stack with S-Corp election. The Section 179 deduction reduces your S-Corp pass-through income, which lowers both your income tax and potentially your QBI deduction calculation. Model both scenarios with our S-Corp Savings Calculator.

Common Section 179 mistakes to avoid

Claiming more than business income. Section 179 cannot create a loss. If your business net income is $50,000, your Section 179 deduction is capped at $50,000 regardless of how much equipment you bought.
Forgetting the 50% business use rule. If business use drops below 50% in any year, you must recapture the excess depreciation as ordinary income. This commonly happens with vehicles that shift to personal use.
Not distinguishing SUV from truck. The $28,900 cap applies to SUVs specifically. Pickup trucks with a full-size bed (6 feet+) and vans are classified differently and have no Section 179 cap.
Ignoring bonus depreciation. Section 179 has an income limitation. Bonus depreciation does not. If you need a deduction that exceeds your income, use bonus depreciation instead.

Want to see how Section 179 fits into your complete tax strategy? Run your free tax assessment — it checks all 35+ IRS strategies against your income, including Section 179, bonus depreciation, S-Corp election, and retirement contributions.