How to Benefit from IRS Tax Section 179
IRS Tax Section 179 allows you to deduct the cost of purchased capital goods from your taxes, and after you deduct the purchase price, you may be eligible for additional depreciation write-offs, too! Businesses that make purchases during 2021 are eligible to claim a deduction of up to $1,050,000 on their taxes, and after a change in 2017, 100% of your depreciation costs can be claimed as well. These benefits may not be available forever, so find out how to benefit today.
Which Vehicles Can Claim the Full 179 Tax Deduction?
Passenger cars, SUVs, and light trucks (like the Ford F-150 or the RAM 1500) are only eligible for a partial deduction of just over $11,000, and that’s only true if they’re used for business purposes more than 50% of the time.
However, vehicles that are often or exclusively used in commercial settings may be eligible for a full write-off. Each of the following may benefit from the IRS tax code for trucks and commercial vehicles:
- Some cargo vans, and passenger vans with nine or more seats
- Tractor-trailers and other cab-chassis trucks
- Vehicles with an enclosed driver’s compartment and no additional seating
- Heavy construction vehicles like backhoes and extractors
If you buy one of these vehicles in 2021, you could claim up to 100% of its purchase price as a deduction on your taxes. Lynch Truck Center specializes in the sale of these vehicles, and we’d love to help our Waterford and Racine neighbors benefit from IRS Tax Section 179!
Maximizing Your End-of-Year Truck Savings
The financing team at Lynch Truck Center is ready to answer any and all of your questions about IRS Tax Section 179, and we encourage you to start a conversation with one of our team members today. While you’re here, learn a little bit more about the limits of the 179 tax deduction:
- Bonus Depreciation: Although this hasn’t always been the case, businesses can now deduct up to 100% of depreciation from their tax bill. So, after you claim all of your new model expenses, find out how much your fleet depreciated in 2021. This bonus limit will start to fall in 2023 unless it is renewed by congress.
- Spending Cap: You can claim a deduction of $1,050,000 on your taxes, up to the total cost of any equipment that you purchased during the year. However, there is an exception for businesses that spend more than $2,620,000 on new equipment. Your total deduction will be reduced by one dollar for every dollar that you spend over this amount.
- Make Sure That Your Vehicle Qualifies: Models with gross vehicle weight ratings of more than 6,000 pounds can often (but not always) qualify for the full refund. The best way to make sure that you’re making a smart purchase is to talk to the experts at Lynch Truck Center.
Explore the IRS Tax Code for Trucks with Our Team!
We’re used to working with Northern Chicago and Milwaukee businesses of all shapes and sizes. Whether you’re just getting your small business off the ground or you’ve been working in this arena for years, our experts can help you make the most of IRS Tax Section 179! Contact us today to learn more about end-of-year truck savings opportunities.
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