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Is 6000 lb vehicle deduction tax deductible?

TL;DR

The 6,000 lb vehicle deduction, often referred to as the 'SUV tax loophole,' is generally deductible under certain conditions for business use, but there are specific requirements and limits to consider.

Detailed Answer

The deduction for vehicles over 6,000 pounds is available under the Section 179 deduction, which allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. To qualify, the vehicle must be used more than 50% for business purposes. However, the deduction is limited to $28,900 for SUVs and similar vehicles for the tax year 2023. Full-sized trucks and vans that meet certain criteria may qualify for a higher deduction. It's important to note that the vehicle must be placed in service during the tax year and used primarily for business. Personal use of the vehicle must be accounted for separately.

Where to Put It on the Tax Form

Schedule C, Line 13 for depreciation and Section 179 deduction. Form 4562 is used to claim the Section 179 deduction.

Real World Example

A real estate agent purchases a new SUV for $45,000 that weighs over 6,000 pounds. She uses the vehicle 80% for business purposes, driving clients to properties and attending meetings. She can deduct $28,900 under Section 179 in the year of purchase, provided she meets all requirements.

Calculation Required

A calculation is required for this deduction.

Calculate the business-use percentage by dividing the business miles driven by the total miles driven. Apply this percentage to the vehicle's cost to determine the deductible amount, subject to the Section 179 limit.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed mileage logs, purchase receipts, and documentation of business use. Ensure personal and business use is clearly separated and documented. Maintain records for at least three years after the tax year in which the deduction is claimed.

IRS Reference

IRC §179, IRS Pub 946

Relevant Industries

Small Business OwnersFreelancersReal Estate AgentsConsultantsConstruction Contractors

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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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