Can I Write This Off?

6000 lbs vehicles

TL;DR

Vehicles over 6,000 lbs may qualify for a Section 179 deduction, allowing businesses to deduct the full purchase price in the year the vehicle is placed in service.

Detailed Answer

The Section 179 deduction allows businesses to deduct the full purchase price of qualifying equipment, including vehicles over 6,000 lbs, in the year they are put into service. To qualify, the vehicle must be used more than 50% for business purposes. Passenger vehicles, SUVs, and trucks with a gross vehicle weight rating (GVWR) over 6,000 lbs but less than 14,000 lbs have a deduction limit, which was $25,900 for 2023. Vehicles used less than 50% for business, or those not meeting the weight threshold, do not qualify for this deduction.

Where to Put It on the Tax Form

Form 4562, Depreciation and Amortization, Part I for Section 179 deduction.

Real World Example

A construction company purchases a new truck with a GVWR of 7,000 lbs for $50,000. The truck is used 80% for business. The company can deduct $25,900 under Section 179 in the year of purchase.

Calculation Required

A calculation is required for this deduction.

Calculate the business use percentage of the vehicle and apply it to the purchase price to determine the eligible deduction amount, up to the Section 179 limit.

Audit Risk & Documentation Tips

Maintain detailed mileage logs and records of business use to substantiate the deduction. Keep purchase receipts and ensure the vehicle's GVWR is documented. Be prepared to demonstrate the business use percentage if audited.

6000 lbs vehicles

TL;DR

Detailed Answer

Where to Put It on the Tax Form

Real World Example

Calculation Required

Audit Risk & Documentation Tips

IRS Reference

Relevant Industries

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