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Is cars over 6000lbs a valid tax write-off?

TL;DR

Yes, vehicles over 6,000 lbs can be a valid tax write-off under certain conditions, primarily through Section 179 and bonus depreciation, but they must be used predominantly for business purposes.

Detailed Answer

Vehicles with a gross vehicle weight rating (GVWR) over 6,000 lbs can qualify for a Section 179 deduction, allowing business owners to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. However, the vehicle must be used more than 50% for business purposes. If the vehicle is used less than 100% for business, only the business-use percentage of the cost can be deducted. Additionally, bonus depreciation may apply, allowing further deductions. It's important to note that luxury auto limits do not apply to these heavier vehicles, making them attractive for tax planning. However, personal use of the vehicle must be carefully documented to avoid IRS scrutiny.

Where to Put It on the Tax Form

Schedule C, Line 13 for depreciation; Form 4562 for Section 179 and depreciation details.

Real World Example

A real estate agent purchases a new SUV with a GVWR of 6,500 lbs for $60,000. The SUV is used 80% for business purposes. The agent can deduct $48,000 (80% of $60,000) under Section 179, assuming they have sufficient taxable income to cover the deduction.

Calculation Required

A calculation is required for this deduction.

To calculate the deduction, determine the business-use percentage of the vehicle. Multiply the vehicle's purchase price by this percentage to find the deductible amount. For example, if the vehicle is used 80% for business and costs $60,000, the deductible amount is $60,000 x 80% = $48,000.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed records of business use, such as mileage logs, receipts, and a calendar of business activities. Ensure that the vehicle's GVWR is documented and that business use exceeds 50%. Maintain records for at least three years after filing the tax return.

IRS Reference

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

Relevant Industries

Small Business OwnersFreelancersReal Estate AgentsConstruction 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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