Section 179 Vehicles For 2025
Your guide to Section 179 business vehicle deductions in 2025.
Section 179 vehicles for 2025: Getting you on the road to big tax deductions.
If you purchase a new or used vehicle for your small business in 2025, you might be able to get a nice tax benefit. The Section 179 tax deduction lets you deduct all or part of the cost of your vehicle in the first year you use it for business purposes, so long as it qualifies for the Section 179 deduction.
Balboa Capital recommends that you speak to a tax professional to determine if the business vehicle you want to purchase is eligible and how much of a deduction your business might qualify for.
Section 179 limits and information on the Balboa Capital website are for illustrative purposes only; the Section 179 limits and information provided are subject to change by the IRS. Please visit the IRS website or consult a qualified tax professional for confirmation of the current Section 179 limits and information related to your situation.
Types of vehicles that are eligible.
Before we begin, it is important to know that the IRS occasionally issues updates, guidance, and new rules relating to Section 179. The vehicles that qualify for deduction might change, so use this information as an initial guide.
Generally speaking, the Section 179 tax deduction applies to passenger vehicles, heavy SUVs, trucks, and vans used at least 50% of the time for business-related purposes. For example, a pool cleaning business can deduct the purchase price of a new pickup truck used to get to and from customers’ homes, so long as the new pickup truck is used more than 50% for business purposes.
Light vehicles.
Millions of small businesses and solo business owners use light vehicles daily. These include passenger cars, crossovers, and small utility trucks. For 2025, light vehicles that weigh under 6,000 pounds have a Section 179 deduction limit of $12,200 in the first year they are used.1
Light vehicles are subject to specific first-year “luxury auto” depreciation deduction limits the IRS sets. These limits impose caps on the amount of first-year depreciation deductions that business owners can claim, resulting in smaller deduction amounts compared to heavy vehicles.
Heavy vehicles.
Heavy vehicles have a Section 179 deduction cap of $31,300 in 2025.2 Let us say you finance a $60,000 heavy SUV and use it 100% for your small business. You could deduct $31,300 under Section 179. For a business vehicle to qualify as “heavy,” it must weigh at least 6,001 pounds and no more than 14,000 pounds.3 Many SUVs, vans, and pickup trucks weigh over 6,001 pounds.
Whether you have a light vehicle or a heavy vehicle, it is essential to know its gross vehicle weight rating (GVWR), which is the maximum safe weight of the vehicle. The GVWR is typically featured on the vehicle manufacturer’s label (located on the inside of the driver’s side door on either a sticker or a thin metal badge) or in the vehicle information package.
Special rules.
Several rules and limitations are associated with the Section 179 deduction concerning business vehicles. One such rule deals with income. First, your Section 179 deduction cannot exceed your annual net taxable income. Next, your vehicle cannot be used to transport people or property for payment or hire.
If you purchase a vehicle, it must be put into service, also referred to as “business use,” in the calendar year you buy it before December 31, 2025. You will need to provide proof that your vehicle was used for business at least 50% of the time when electing the Section 179 deduction. This will be helpful if your company ever has to deal with a tax audit. Lastly, a bonus depreciation of 40% may apply to your business vehicle purchase in 2025.4
Source:
1, 2, 3, 4 https://www.sdocpa.com/list-of-vehicles-over-6000-lbs-section-179/
Helpful links for small business owners.
Section 179 calculator
Instantly see how much you might be able to deduct.
Section 179 vehicles infographic
A visual look at how Section 179 works with business vehicles.
Last-minute tax strategies
A must-read if the clock is ticking on this year’s tax deadline.
