Strategy Snapshot
Section 179 and bonus depreciation both let you front-load deductions on business assets. Section 179 expensing is now up to $2.5 million but cannot create a loss; 100% bonus depreciation is permanent and can. For vehicles, the deduction depends almost entirely on gross vehicle weight rating and how much you use it for business.
Section 179 expenses qualifying property up to a high cap but is limited to your business income. Bonus depreciation deducts 100% in year one and can create a loss. Most owners use them together.
Vehicles over 6,000 pounds GVWR escape the strict luxury-auto caps. Heavy SUVs get a large Section 179 amount plus bonus; pickups and vehicles over 14,000 pounds can often be fully expensed.
Business use must exceed 50%, and it must stay there. If business use later drops, part of the deduction is recaptured and added back to income.
For trades and service businesses, vehicles and equipment are the biggest purchases of the year, and the tax code lets you deduct most of them immediately rather than over a decade. The “6,000-pound vehicle deduction” gets the attention, and it is real, but it is one piece of a larger system, and the details, weight class, business-use percentage, and recapture, are where owners either keep the deduction or hand part of it back.
Buy a qualifying truck or piece of equipment, put it to work this year, and you can often deduct the entire cost on this year’s return instead of spreading it across the next five to seven.The core benefit
Two Tools That Work Together
There are two ways to front-load deductions on business assets, and most owners use both.
Section 179 expensing. You elect to deduct the full cost of qualifying property in the year you place it in service. For 2025, the cap is $2.5 million, with a phase-out beginning once total purchases exceed $4 million. The key limit: Section 179 cannot create a loss. It is capped at your business’s taxable income.
Bonus depreciation. The 2025 tax law restored 100% bonus depreciation permanently for qualifying property placed in service after January 19, 2025. Unlike Section 179, bonus has no dollar cap and can create a loss.
| Section 179 | Bonus depreciation | |
|---|---|---|
| 2025 limit | $2.5M (phase-out at $4M) | None |
| Can create a loss? | No | Yes |
| Election flexibility | Asset by asset | Applies by asset class |
| Typical order | Applied first | Applied to the remainder |
The Vehicle Rules Turn on Weight
This is where most of the confusion lives. The deduction available on a vehicle depends almost entirely on its gross vehicle weight rating (GVWR), the number on the door-jamb sticker, and three tiers govern the result.
The practical takeaway for a trades business: a work truck, cargo van, or qualifying pickup over 6,000 pounds GVWR, used predominantly for the business, can usually be deducted in full the year you buy it.
The 50% Business-Use Gate
None of this works without business use. To claim Section 179 or bonus depreciation on a vehicle, business use must exceed 50%. If it does:
- You deduct the business-use percentage of the cost (an 80% business-use truck yields an 80% deduction)
- You must keep a mileage log substantiating the percentage
If business use is 50% or less, you lose Section 179 and bonus entirely and must use slower straight-line depreciation.
Section 179 Is Limited by Income; Plan Accordingly
Because Section 179 cannot create a loss, timing matters. In a strong-profit year, a large equipment purchase plus Section 179 can wipe out a big chunk of taxable income. In a break-even year, Section 179 is capped at that low income, which is exactly when bonus depreciation (which can create a loss and carry forward) becomes the better tool. Coordinating the two against your actual profit is the planning move.
Where It Fits in Your Broader Plan
For a profitable trades or service business, the vehicle and equipment deduction rarely stands alone. It pairs naturally with an S-corp election to cut self-employment tax, the QBI deduction on remaining profit, and the everyday small-business strategies like accountable plans and hiring family. Section 179 is often the single biggest lever, but the savings compound when it is part of a plan rather than a December scramble.
When to Seek Help
Buying a sub-6,000-pound car for occasional business use is simple, and limited. The value of advice shows up when you are making a large equipment or heavy-vehicle purchase, when you want to time it against a high-profit year, or when you are coordinating Section 179 with bonus depreciation to either maximize this year’s deduction or preserve a loss to carry forward. A short conversation before you buy, and before December 31, ensures the purchase lands in the right year, the weight class actually qualifies, and the deduction holds up if the IRS ever asks for the log.
Last updated: 2026