What Is Section 179 & What Does It Mean For You?
Business owners need to be adept at understanding various tax laws to save money and get unique tax benefits. Section 179 of the United States tax law states that a business can deduct up to the full purchase price of a new or used vehicle that has a Gross Vehicle Weight Rating (GVWR) of 6,000 lbs or more and is used for business purposes more than 50% of the time.
Section 179 Deductions & Limitations
For the 2023 tax year, businesses can write off as much as 1,160,000 dollars worth of vehicles, equipment, and even software used by and for the company. As Section 179 is especially important for small and medium-sized businesses, it is essential to note that the tax law has a couple of main limitations.
- The amount of money deducted can not be more than the income of the business owner’s trades or total businesses they own.
- If the qualified assets the business owner puts into effect during the taxable year exceeds $2.89 million, including inflation indexing, the deduction allowance phases out
What Vehicles Does Section 179 Apply To?
It is important to note that Section 179 allows for business owners to deduct the purchase price of both new and used vehicles and equipment, whether it is financed, leased, or purchased in full.
What vehicles qualify for a 100% tax deduction at Rairdon’s Chrysler Dodge Jeep RAM of Bellingham?
- Ram 1500 (some 1500 models with a GVWR of less than 6,000 lbs are only subject to a value loss deduction and not a purchase price deduction)
- Ram 1500 Classic
- Ram 2500 & 3500
- Ram 3500, 4500 & 5500 Chassis Cab
- Ram ProMaster
Certain Jeep vehicles qualify for up to 80% of the total purchase price deduction:
- Gladiator
- Rubicon
- All 2023 models with available max towing package
- Mojave
- 2023 models with 3.0-liter EcoDiesel V6
- Grand Cherokee (2 and 3-row)
- All 2023 and 2024 trim levels, including 4xe
- Wrangler
- ‘23 and ‘24 Rubicon 392
- 4xe models
- 2023 3.6-liter Rubicon 4-door with Xtreme Recon Package
Please keep in mind that this content only takes the place of a discussion with your sales representative and a licensed tax professional to have all of the relevant facts and information presented to you to understand all about Section 179 fully. Tax law can be challenging to comprehend, and this article is for guidance only and not to be used in place of an expert’s advice.
At Rairdon’s Chrysler Dodge Jeep RAM of Bellingham, we take pride in offering the best prices on nearly a thousand new and used vehicles. Our excellent sales team and finance department will take great care of your needs and find the right vehicle for you. Our fantastic service department will work tirelessly to maintain your new vehicle.
We look forward to serving you.
