Tax Savings

Section 179 Tax Savings

Section 179 of the I.R.S. tax code offers significant deductions on qualifying business vehicles.

What business vehicles may qualify?

You may qualify if you:

  • Are a business that purchased or financed qualifying new or used business equipment, including certain business-use vehicles, during the 2020 tax year.

  • Put the equipment into service between January 1, 2020, and December 31, 2020.

  • Used this equipment for business purposes more than 50% of the time.

  • Spent less than $3,500,000 on this equipment.

How much could I deduct?

These are the limits:
  • With the passage and signing into law of H.R.1, aka, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increased to $1,000,000 for 2018 and beyond. You cannot write off more than $1,000,000.

  • The total amount of the equipment purchase cannot be more than $2,500,000. It phases out dollar-for-dollar after that, so once $3,500,000 is spent, the deduction goes away entirely.

Section 179 Highlights

  • Section 179 allows qualifying businesses to deduct up to the full purchase price of certain new or used vehicles, equipment and/or software purchased and placed into service during the tax year.

  • To qualify, the percentage of business use for the vehicle, equipment or software must be more than 50%.

Learn More

*Certain restrictions apply so it’s important to check with your accountant.