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Can freelancers deduct vehicles over 6000 pounds?

TL;DR

Freelancers can deduct the cost of vehicles over 6,000 pounds if they are used for business purposes, but specific rules and limits apply, such as the Section 179 deduction and bonus depreciation.

Detailed Answer

Vehicles over 6,000 pounds can qualify for significant tax deductions under Section 179 and bonus depreciation. To qualify, the vehicle must be used more than 50% of the time for business purposes. The Section 179 deduction allows for immediate expensing of up to a certain limit, which is adjusted annually, and the remaining cost can be depreciated over subsequent years. However, personal use of the vehicle must be excluded from the deduction calculation. For example, if a vehicle is used 70% for business, only 70% of the cost can be deducted. The IRS imposes limits on the amount that can be deducted in the first year, and these limits can vary based on the vehicle's weight and type. It's crucial to maintain detailed records of business versus personal use to substantiate the deduction.

Where to Put It on the Tax Form

Schedule C, Line 13 for depreciation and Line 9 for car and truck expenses.

Real World Example

A freelance photographer purchases an SUV weighing 6,500 pounds for $70,000. She uses it 80% of the time for business. She can potentially deduct $56,000 (80% of $70,000) under Section 179 and bonus depreciation, subject to annual limits.

Calculation Required

A calculation is required for this deduction.

Calculate the business-use percentage by dividing business miles by total miles driven. Multiply the vehicle's cost by this percentage to determine the deductible amount. Apply Section 179 and bonus depreciation limits as applicable.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed mileage logs, receipts, and records of business use. Document the vehicle's purchase price and maintain a calendar of business activities requiring vehicle use to support the deduction.

IRS Reference

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

Relevant Industries

FreelancersReal Estate AgentsConsultantsContractors

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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 25, 2025

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