 
Reduce Your Tax Liability With The IRS Section 179 Tax Deduction
What is Section 179 IRS Vehicle Deduction?
Many people think the Section 179 deduction is complicated, but it's quite straightforward. It allows businesses to deduct the full purchase price of qualifying equipment or software that they buy or finance within the tax year. This incentive encourages businesses to invest in their growth. In the past, it was referred to as the "SUV Tax Loophole" because it applied for large vehicle deductions, though those benefits have since been reduced. Nonetheless, Section 179 remains highly advantageous for small businesses, offering significant tax relief and being included in recent stimulus packages.
Large businesses can also benefit from Section 179 and Bonus Depreciation, but the primary aim of this legislation is to provide tax relief to small businesses. Today, it continues to be one of the few government incentives designed to support small companies, with millions taking advantage of it to reduce their tax burden and reinvest in their growth.
What is The Tax Deduction Limit?
The maximum tax deduction amount is $1,220,000. This deduction applies to both new and used Ford vehicles. To qualify for the deduction in the 2024 tax year, the equipment must be financed or purchased. Additionally, the vehicle must be put into service between January 1, 2024, and December 31, 2024.
What is the spending cap on equipment purchases?
The spending limit for equipment purchases is $3,050,000. This is the maximum amount that can be spent on equipment before the Section 179 Deduction begins to decrease on a dollar-for-dollar basis. This cap reinforces Section 179 as a genuine "small business tax incentive."
What is The Bonus Depreciation?
The Bonus Depreciation rate is 60%. It is typically applied after reaching the Section 179 Spending Cap. Please note that Bonus Depreciation is only available for new equipment. It’s advisable to consult your tax professional to determine which equipment qualifies for Bonus Depreciation.
2024 Section 179 (Example Calculation)
First Year Write Off..........
$1,220,000 ($1,220,000 = Maximum in 2024)
80% Bonus First-Year Depreciation..........
$48,000 (updated to 60% via Tax Cuts & Jobs Act)
Normal First Year Depreciation..........
$0 (Bonus Depreciation Taken Instead)
Total First Year Deduction..........
$1,268,000 ($1,220,000 + $48,000 + $0)
Tax Savings..........
$443,800 (cash you keep instead of sending to the IRS)
Equipment Cost after Tax..........
$856,200 (assuming a 35% tax bracket)
The example provided offers a general "simplified" overview of the Section 179 Deduction for 2024. For more information on limits, qualifying equipment, and Section 179 Qualified Financing, please visit Section179.org or consult your tax advisor.
How Do I Qualify For Section 179 Deduction?
If you own a car and use it for business, the IRS allows this, but there are limits on the amount you can depreciate and deduct from your taxes. The deduction limit is $1,220,000 for vehicles used by you or other passengers (in addition to any purchase costs that may accumulate).
For trucks and SUVs with a Gross Vehicle Weight Rating (GVWR) over 6,000 lbs, a partial deduction is available if the business use exceeds 50%. However, the deduction limits can vary depending on the type of vehicle.
Vehicles weighing between 6,000 lbs. and 14,000 lbs. that are used for business at least 50% of the time generally qualify for the following deductions:
- Pickup trucks with a full-size (8’) cargo bed
- Heavy SUVs – with a maximum deduction cap of $30,500 for 2024. The conditions require that you must purchase your vehicle before December 31st, 2024.
Note: The deduction for business vehicles is the same regardless of whether it is a lease, purchased, or financed.
For more information please visit Section179.org.
Which Ford Models Qualify for IRS Section 179 Deduction?
Bill Walsh Ford boasts an impressive inventory of models that may qualify for Section 179. Speak with a sales representative to learn more about eligible Section 179 pickup trucks, vans, and SUVs. At Bill Walsh Ford, we support local businesses by providing great deals on commercial vehicles and informing business owners about the Section 179 Tax Deduction in Ottawa, Illinois.
Discover which vehicles qualify for Section 179 with us today!
Additionally, Bill Walsh Ford offers a wide range of Vehicle Lease Deals and Finance Offers in Ottawa, Illinois! Visit our dealership today for a test drive.
Additional Section 179 Deduction Rules To Know
It might seem complicated, but it's straightforward. Most taxpayers need to provide basic information about their vehicle's primary use—whether for work or personal reasons doesn't matter. They also need to estimate the expected value of the vehicle over ten years. This simple input will yield crucial details, such as applicable limits on personal and business use percentages.
1. Please reach out to the Bill Walsh Ford sales team for specific information on which vehicles qualify for Section 179. 2. This information is not intended as tax advice or guidance. Please consult your tax professional for the exact rules related to the IRS Section 179 deduction, how it can lower your tax liability, and details on associated laws and qualifying vehicles.
Purchase Your Next Ford Business Vehicle at Bill Walsh Ford Today!
Looking for a new Ford SUV, truck, or van for your business? Many Ford models in those categories qualify for the IRS Section 179 Deduction. Explore our selection of new Ford vehicles today in Ottawa, IL, and visit Bill Walsh Ford for a test drive!