Page 15 - JanuaryBuilderBrief

Section 179: Depreciation Deductions TAX TIP

for Business Vehicles

Section 179 of the U.S. tax code can present a Section 179 deduction to vehicles purchased for
welcome opportunity for small business owners at business reasons, business owners should keep in
tax time. mind that there may be restrictions in place for this
An economic incentive designed to encourage type of purchase.
the purchase of business-related equipment in Under Section 179, vehicles unlikely to be used for
order to spur growth in the economy, Section 179 personal use qualify for the full deduction (those
lets some taxpayers deduct the full or partial cost with a fully enclosed driver’s compartment/cargo
of certain types of property from their federal taxes area, for example). Passenger vehicles are subject
for the year the property was purchased and put to certain deduction limits, even if they’re used for
into service. work more than 50% of the time. Similarly, SUVs,
Congress approved a bill in 2015 to permanently trucks and vans that do not meet specific IRS
raise the Section 179 aggregate deduction limit to guidelines are also subject to limitations.
$500,000 on qualifying equipment. “Qualifying If you purchased a new work vehicle in 2017, you
equipment” in this case is defined by the IRS as may benefit from Section 179. Consult a certified
machinery, computers, office furniture, software tax preparer to see the estimated Section 179
and so on. Visit the IRS website to see the list of expense allowances for Chrysler, Dodge, Jeep®,
purchases that qualify. Ram and FIAT Brand vehicles.
While many people can and do apply the NAHB DEC 2017

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JANUARY 2018 | GREATER SAN ANTONIO BUILDERS ASSOCIATION 15