Section 179: Deduct the Cost of Your Truck
Are you getting the most out of your truck purchase? Leverage Section 179 for your business!
Section 179 FAQ for Truck Owners
Q1. What is Section 179?
A: Section 179 allows a business to deduct the full purchase price of qualifying equipment (rather than depreciating it over several years) in the year the property is placed in service. For truck owners, this means you may deduct the cost of a heavy-duty truck if the requirements are met.
Q2. Why does it matter for truck owners?
A: For trucking businesses, using Section 179 can:
Lower taxable income in the year you first use the vehicle, improving cash flow.
Make the acquisition of a new truck more financially attractive rather than waiting to depreciate it over many years. For example, a truck purchased in 2025 and placed in service during 2025 could be fully deducted under Section 179 plus potentially bonus depreciation.
Q3. Which trucks qualify for Section 179?
A: The key qualification criteria for trucks:
The vehicle must be used more than 50% for business.
The vehicle must be placed in service in the relevant tax year (e.g., 2025).
For vehicles over 6,000 lbs Gross Vehicle Weight Rating (GVWR), especially heavy work trucks, the special “SUV/ passenger vehicle” limits don’t apply; they may qualify for full expensing.
New or used trucks both can qualify, as long as “new to you” and placed in service.
The purchase (or finance) must be completed and the truck must be in service by December 31 of the applicable tax year. If you need a truck now, we suggest viewing our stock trucks.
Q4. What are the limits for Section 179 in 2025?
A: For the tax year 2025, some of the limits are:
Maximum Section 179 deduction: $2,500,000 (subject to phase-out).
Phase-out begins at $4,000,000 of total qualifying equipment purchases; fully phased out at $6,500,000.
Bonus depreciation (after Section 179) is 100% for 2025.
For trucks under the “SUV” special rule category (over 6,000 lbs but under 14,000 lbs GVWR) there’s often a different cap (e.g., ~$31,300) for Section 179. However, many heavy-duty trucks (such as those used in trucking fleets) weigh more than the SUV threshold and may qualify for the full deduction as equipment.
Q5. How does it work with bonus depreciation?
A: The typical workflow:
You purchase and place the truck in service in the tax year.
You apply Section 179 deduction up to the limit.
If there’s remaining basis, you may apply 100% bonus depreciation (for 2025) on the leftover.
Any remaining cost (if not fully deducted) is depreciated over future years. This means you could deduct very large amounts in year one, improving cash flow.
Q6. What are “business-use” requirements?
A: The vehicle must be used more than 50% for qualified business purposes. If less than 100% business use, your deduction is limited to the business-use percentage. For example, if the truck is used 70% for business and 30% personal, you can only deduct 70% of the cost under Section 179. Also maintain documentation (mileage logs, usage records) to substantiate business use.
Q7. Are there deadlines or timing issues?
A: Yes. Some key timing points:
The truck must be placed in service (meaning ready and available for use) in that tax year. Don't forget: we have ready-to-work trucks in stock now!
For 2025, if you want to take the full deduction in 2025, the purchase/financing and in-service date must occur by December 31, 2025.
Remember, tax law is subject to change and you must ensure you meet the IRS rules for the year in question.
Q8. What records do I need to keep?
A: Important documentation includes:
Purchase invoice or contract showing cost and date.
Date the truck was placed in service.
Proof of business use (logs, usage records).
Financing/lease documents if applicable.
Tax form 4562 (to elect Section 179) must be filed with your tax return.
Q9. What if I don’t have enough taxable income that year?
A: If your business’s net taxable income limits your Section 179 deduction (you cannot deduct more than your business income), you may carry forward the unused portion to future years.
Q10. Does this apply to used trucks or only new trucks?
A: Yes, both new and used qualifying equipment can be eligible. The equipment must be “new to you” and placed in service in the year you take the deduction.
Q11. Are there state-tax issues I should be aware of?
A: Yes. While the federal deduction follows Section 179 rules, states may have different conformity rules (some allow, some limit or disallow). You’ll want to check with your tax-advisor for how Section 179 is treated in your line of work in your state.
Q12. Is my heavy-duty truck automatically eligible?
A: Not automatically. You must ensure:
The truck meets the business-use (>50%) requirement.
It meets the weight/usage categories to avoid SUV/ passenger-vehicle caps (if such apply).
The purchase and service placement occur in the tax year.
You make the Section 179 election (via Form 4562) on your tax return. Also, always consult a qualified tax advisor for your specific situation.
Q13. How much tax savings can I expect?
A: The actual tax savings depend on your tax bracket and business profitability. As one example: for a hypothetical equipment purchase of $2,750,000 in 2025:
Section 179 deduction: $2,500,000
Bonus depreciation: $250,000
Combined tax deduction: $2,750,000. If you’re in a 35% tax bracket, that might translate to roughly $962,500 in tax savings (based on that example). Of course, real-world numbers will vary by your business income, state taxes, and other deductions.
Q14. What should I do next if I’m considering buying a truck and using Section 179?
A: Recommended next steps:
Talk to your tax advisor or CPA early — make sure the purchase qualifies and fits your tax planning.
Determine business-use percentage and document usage plans.
Ensure the truck purchase and place‐in‐service date will occur by year end if you intend to claim in that tax year.
Consider financing or leasing structures optimized for Section 179 (many vendors offer “qualified financing” options)
Keep records—purchase documents, usage logs, business-use documentation, financing documents, etc.
File Form 4562 with your tax return to make the Section 179 election.
Disclaimer
This FAQ provides general information only and is not tax or legal advice. Always consult with a qualified tax professional regarding your specific business and situation.