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Is tax write off for vehicle over 6000 lbs a valid tax write-off?

TL;DR

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

Detailed Answer

Vehicles over 6,000 lbs can qualify for significant tax deductions under the IRS Section 179 deduction and bonus depreciation rules. To qualify, the vehicle must be used more than 50% for business purposes. Section 179 allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. For vehicles, there are specific limits and caps; for instance, the maximum Section 179 deduction for SUVs is limited to $28,900 for the 2023 tax year. Bonus depreciation can also be applied to the remaining cost of the vehicle. However, if the vehicle is used for less than 50% business use, these deductions may not apply, and standard depreciation rules would be used instead. It's crucial to maintain detailed records of business versus personal use.

Where to Put It on the Tax Form

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

Real World Example

A real estate agent purchases a new SUV for $60,000, which is used 80% for business purposes. They can deduct $28,900 under Section 179 and apply bonus depreciation to the remaining business-use portion of the cost. The deduction is reported on Schedule C and Form 4562.

Calculation Required

A calculation is required for this deduction.

To calculate the deduction, determine the business-use percentage of the vehicle. Apply the Section 179 limit to the business-use portion of the cost, then apply bonus depreciation to any remaining business-use cost. For example, if a vehicle costs $60,000 and is used 80% for business, the business-use portion is $48,000. Deduct $28,900 under Section 179, then apply bonus depreciation to the remaining $19,100.

Audit Risk & Documentation Tips

Moderate audit risk. Maintain detailed mileage logs, purchase receipts, and records of business versus personal use. Ensure that the vehicle is used more than 50% for business to qualify for Section 179 and bonus depreciation. Keep records for at least three years after filing the tax return.

IRS Reference

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

Relevant Industries

Real Estate AgentsConsultantsConstruction ContractorsFreelancers

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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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