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Can freelancers deduct 6000 pound vehicle tax deduction?

TL;DR

Freelancers can potentially deduct expenses related to a vehicle over 6,000 pounds if it is used for business purposes, but specific rules and limitations apply, such as the Section 179 deduction and bonus depreciation limits.

Detailed Answer

The deduction for a vehicle over 6,000 pounds primarily involves the Section 179 deduction and bonus depreciation. Under Section 179, a freelancer can deduct the cost of a qualifying vehicle used for business purposes, up to a limit, which for SUVs is typically capped at $25,000. The vehicle must be used more than 50% for business. Bonus depreciation allows for additional deductions, but the vehicle must be new to the taxpayer. If the vehicle is used less than 100% for business, only the business-use percentage of the cost can be deducted. For example, if a vehicle is 70% used for business, only 70% of the allowable deduction can be claimed. Note that the vehicle must be placed in service during the tax year for which the deduction is claimed.

Where to Put It on the Tax Form

Schedule C, Line 13 for depreciation and Section 179 deduction.

Real World Example

A freelance photographer purchases a new SUV for $50,000, which is used 80% for business. The photographer can claim a Section 179 deduction up to $25,000 for the business portion, which is $20,000 (80% of $25,000), and potentially apply bonus depreciation to the remaining business-use cost.

Calculation Required

A calculation is required for this deduction.

To calculate the deduction, determine the business-use percentage of the vehicle. Multiply the total cost by this percentage to find the deductible amount. Apply Section 179 limits and bonus depreciation rules accordingly.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed mileage logs, receipts, and documentation proving business use. Maintain records of the vehicle's purchase and any related expenses. Ensure that business-use calculations are accurate and well-documented.

IRS Reference

IRS Publication 946, How to Depreciate Property; IRC §179.

Relevant Industries

FreelancersConsultantsReal Estate AgentsContractors

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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