As a small business owner, the quest to minimize tax liabilities is a high priority. One effective strategy to achieve this goal is the acquisition of a business vehicle weighing more than 6000 pounds, presenting a compelling avenue for substantial tax deductions. Particularly, Section 179 Vehicles offer a powerful tool that can translate into significant tax savings, potentially saving your business thousands of dollars.
To streamline your search and facilitate informed decision-making, we have meticulously assembled the “IRS Section 179 Deduction Vehicle List 2023-2024.”
This comprehensive list encompasses the most commonly utilized vehicles exceeding 6000 pounds, serving as a valuable resource to guide you through the process of selecting a qualifying vehicle that aligns with both your business needs and tax optimization objectives
What is IRS Section 179 Deduction?
Internal Revenue Code, Section 179 Deduction allows you to expense up to $25,000 on Vehicles (One year) that are between 6000 Pounds and 14,000 Pounds or More in the year they are placed in service.
If you are looking to write off the entire purchase price of your business vehicle, look into Bonus depreciation rules that were passed under TCJA. We have more details below.
To learn more about Section 179 See IRS Section 179 Details here
What is Bonus Depreciation?
Bonus Depreciation has been significantly improved by the Tax Cuts and Jobs Act.
Under new TCJA, Bonus Depreciation allows you to deduct a specified percentage of the cost of assets in the year they are placed in service. This deduction allows you to take your profit to negative as compared to Section 179 which only allows you to break even or make your profit zero.
For SUV’s such as Mercedes G Wagon that are 6000 pounds or more, can be deducted up to 80% in the year purchased(2023) and placed in service.
Tip: Under Bonus Depreciation rules, you can even purchase a Used SUV or Pickup and use Bonus Depreciation as well.
How to Verify Gross Vehicle Weight Rating (GVWR)?
Best way to verify if a Vehicle Gross Vehicle Weight is over 6,000-pounds (GVWR) is by checking inside drivers door.
Most brands have a manufacturer sticker that is attached to the Drivers Side Door that you can look at to verify the GVWR.
Some manufacturers use stickers and some use metal plates that is attached to the vehicle body.
The gross vehicle weight rating (GVWR) indicates how much weight can be safely transported by this particular auto model –including passengers, fuel/cargo capacity etc…
Tip: GVWR is important not just for taxation purposes but also safety reasons because overloading certain models could lead them into dangers such was poor handling abilities or crashes became more likely due lack shredded tires when driving through potholes.
Cars (Vehicles) over 6000 Pounds | Cars (Vehicles) that Qualify for Section 179 & Bonus Depreciation
|Gross Vehicle Weight
|Q7 & SQ7
|6,393 to 6,581 lbs
|Q8 & SQ8
|6,162 to 6,559 Lbs
|BMW X7 (all models)
|6,989 to 7,319 lbs
|7,400 to 7,600 lbs
|COLORADO 2.8L AWD
|6,800 to 7,100 lbs
|7200 to 7400 lbs
|TAHOE 2WD LS
|TAHOE 4WD LS
|7100 to 7300 lbs
|FORD F-150 and larger 2WD/4WD
|SIERRA C2500 HD
|9900 to 10850 lbs
|SIERRA C3500 HD
|10750 to 11500 lbs
|SIERRA K2500 HD
|SIERRA K3500 HD
|10,750 to 11,500 lbs
|7,100 to 7,500 lbs
|YUKON XL C1500
|YUKON XL K1500
|6614 to 7055 lbs
|6415 to 7120 lbs
|7,300 to 7,500 lbs
|NV 1500 S V6
|NVP 3500 S V6
|TITAN 2WD S
|6,239 to 6,471 lbs
|RAM 1500 and up
|6,010 to 7,800 lbs
|6,000 to 6,001 lbs
|4RUNNER 2WD/4WD LTD
|6,100 to 6,300
|SEQUOIA 2WD/4WD LTD
|7,100 to 7,300 lbs
|7,210 to 7,780 lbs
Section 179 Vehicles ( Light Vehicles vs. Heavy Vehicles vs. Other Vehicles)
There are 3 different vehicles types when it comes down to Section 179 vehicles. Each vehicle type has different amount of deduction and limits that apply to them. IRS has clear guidelines that must be followed so you can get maximum section 179 deduction for your vehicle. Lets learn Section 179 Vehicle Types…
Light Section 179 Vehicles
These are vehicles that has Manufacturer GVWR of less than 6,000 Pounds.
Typically light vehicles include passenger vehicles(cars), small and light crossover SUVs, and small pickup trucks and small utility trucks.
You can get section 179 deduction vehicle tax break of $10200 in the first year and remaining over 5 year period. You can also use Bonus depreciation to be able to deduct up to 100% of the purchase price.
Heavy Section 179 Vehicles
These are vehicles that has Manufacturer GVWR of 6000 pounds to 14,000 Pounds.
Typically heavy vehicles include full size large SUVs, commercial work vans, and full size large work pickup trucks
You can get section 179 deduction vehicle tax break of $25000 in the first year and remaining over 5 year period. You can also use Bonus depreciation to be able to deduct up to 100% of the purchase price.
Other Section 179 Vehicles
These are vehicles that has Manufacturer GVWR of more than 14,000 Pounds.
Typically other section 179 vehicles include Shuttle Vehicles having more than nine passengers behind the driver’s seat
Can I Claim Mileage on Vehicles 6,000 Pounds or over GVWR?
Yes, you can claim mileage on all business vehicles regardless of weight.
We recommend if you drive the vehicle more than 50% for work then you reconsider mileage and use Actual vehicle deduction instead.
Section 179 and Bonus depreciation provides very nice depreciation along with your Fuel, Repairs and Vehicle Insurance can mostly add up to be more than Mileage Deduction.
Can you take Section 179 or Bonus Depreciation on Financed Vehicles?
Yes, You can finance your vehicle by putting minimal down and still take section 179 or Bonus depreciation on the vehicles.
For example if you are purchasing a SUV for $110,000, you can put $10,000 down payment, finance remaining $100,000(over 5 years) yet still claim $110,000 dollars in tax deduction using section 179 and Bonus Depreciation.
Not all the banks are the same when you are looking to finance your business vehicle, we recommend checking out our article: Best Business Auto Loans?
The IRS Section 179 Vehicle List of vehicles over 6000 pounds is a comprehensive list of all the eligible vehicles for the tax deduction.
However, there are other factors to consider when choosing a vehicle beyond weight.
In order to make an informed decision about which vehicle to purchase, it’s important to research all the options and consult with your accountant or financial advisor.
At TaxSaversOnline, we want our customers to be well-informed and have access to all the latest information about purchasing a business vehicle. Be sure to check out our blog for more tips on buying and leasing business vehicles, as well as news and updates about tax laws.
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