Quick guide · 3 min read
Section 179 and heavy vehicles
Cars used for business are normally limited by "luxury auto" caps that spread the deduction over many years. Vehicles with a gross vehicle weight rating above 6,000 pounds are not subject to those caps. Combined with Section 179 and bonus depreciation, most of the business share of the cost can be deducted in the year you start using it.
It is one of the largest single deductions available to business owners, and one of the most misused. The rules below are what make it hold up.
- Who it fits
- Business owners buying an SUV, truck or van over 6,000 pounds for business use.
- Usually not a fit
- Anyone whose business use will be 50% or less, and owners who need deductions spread evenly over future years.
- Figures
- 2026 tax year
The key rule
The deduction applies only to the business-use percentage, and business use must be more than 50%. Bonus depreciation is 100% for property acquired after January 19, 2025.
How it works
Three pieces work together:
- Weight. A GVWR above 6,000 pounds takes the vehicle out of the yearly luxury-auto caps.
- Section 179. Lets you expense the business share of the cost right away, but SUVs have a separate Section 179 cap (just over $31,000 for 2025, adjusted each year). Section 179 also cannot create a business loss.
- Bonus depreciation. Covers what Section 179 does not, with no SUV cap and no income limit.
Pickup trucks with a cargo bed at least six feet long, and many vans, are not treated as SUVs, so the SUV cap does not apply to them.
6 steps
Check the weight rating
Find the GVWR on the sticker inside the driver's door. It must be above 6,000 pounds. Curb weight does not count.
Estimate business use honestly
Commuting from home to your regular office does not count. Trips to clients, job sites, suppliers and between business locations do.
Decide who should own it
Personal name with reimbursement, or the business. See the vehicle ownership guide.
Place it in service by December 31
The vehicle must be delivered and used for business during the year you want the deduction. Ordering it is not enough.
Keep a mileage log
Date, destination, purpose and miles for each business trip, kept as you go. A phone app is the easiest way.
Keep business use above 50%
If business use falls to 50% or below in a later year, part of the deduction is recaptured as income.
Example
A heavy SUV
Your S corp buys a $90,000 SUV with a 6,500-pound GVWR, used 80% for business. The business share is $72,000. Section 179 covers the SUV cap, and bonus depreciation covers the rest, so the S corp can deduct about $72,000 in the first year.
Common mistakes
- Buying a vehicle in December just for the deduction, without real business use.
- No mileage log. Without it, the business-use percentage is hard to defend.
- A large first-year deduction leaves little to deduct in later years, and selling the vehicle can trigger recapture.
Key dates
- December 31
- Vehicle must be in business use to count this year.
Questions we hear
Does financing affect the deduction?
No. You can deduct the business share of the full price even if most of it is financed.
What about electric vehicles?
Many EVs are heavy enough to qualify. The federal clean vehicle credits ended for vehicles acquired after September 30, 2025.
What to send us
- Purchase agreement
- Mileage log
- Loan documents, if financed
Upload them to your client portal.
General education for TaxSquad clients, not advice for your situation. Rules and figures change. Talk to us before acting on this guide.