Tax Deductions for Vehicles Over 6,000lbs

Author: Bojan Radulovic

If you operate a business, searching for tax deductions is probably something that becomes a part of your daily regime as the April 15th deadline approaches each year. In case your business is or includes some form of transportation, however, there is a good chance that you ran into specific deductions for vehicles weighing over 6,000 pounds. If not, this will be an opportunity to learn the basics of this seemingly complex tax benefit that millions of taxpayers are unaware of. So, how much are you allowed to take as an expense on heavy vehicles placed in service?

Photo by Basil Furgala. Posted
How Section 179 Works

The easiest way to get some money back is to rely on something known as accelerated depreciation. In general, the IRS allows your business to deduct $1 million worth of Section 179 deductions in any given tax year. While this is subject to a slew of strict requirements, it remains one of the most beneficial tax breaks that a business relying on heavy assets could get. Before getting into the various limits, let us analyze the exact types of assets that are eligible under this category:

  • Acquired for business use
  • Acquired by purchase (not gifts)

Once you get past those first few requirements, you will drill down into the details of the asset to truly ascertain if you can deduct it or not. Those details are based on determining whether the asset is:

  • Tangible personal property such as machinery and equipment, livestock, property in a building
  • Off-the-shelf computer software
  • Storage facilities
  • Qualified real property including improvements to the building or internal structures of it

The maximum deduction that you can claim under Section 179 is $1 million.

See the rest of the story:
**Please note-this article is a general outline. You should talk with a tax professional for advice for your company.**