Section 179 Deduction Vehicle List For 2023
Section 179 deductions for vehicles are a tax provision that allows businesses to deduct the cost of qualifying vehicles in the year of purchase, rather than depreciating the expenses over several years. This deduction is designed to incentivize business investment in vehicles and provide upfront tax savings.
Under Section 179 of the Internal Revenue Code, businesses can deduct the full cost of eligible vehicles that are used for business purposes. The deduction applies to both new and used vehicles, as long as they meet certain criteria.
To qualify for the Section 179 deduction, the vehicle must be used primarily for business purposes, such as transporting goods, visiting clients, or other work-related activities. It should not be used primarily for personal purposes.
The deduction limit for vehicles is subject to annual changes based on tax laws and regulations. In recent years, the maximum deduction limit has been set at a certain dollar amount, which may vary.
In this article we will delve into what vehicles qualify for a section 179 deduction in 2023
What Vehicles Qualify For Section 179 Deduction in 2023?
100% "Work-Use-Only" Vehicles:
Vehicles capable of accommodating nine or more passengers behind the driver's seat, such as hotel or airport shuttle vans, fall into this category.
Additionally, vehicles meeting the following criteria are considered 100% work-use-only vehicles:
They have a fully enclosed driver's compartment/cargo area.
There is no seating available behind the driver's seat.
The body section does not extend more than 30 inches beyond the leading edge of the windshield. These are commonly referred to as classic cargo vans.
For such vehicles, a full deduction is usually applicable.
Heavy Construction Equipment and Machinery:
Heavy construction equipment, machinery, forklifts, farm tractors, skid steers, and similar vehicles typically qualify for the Section 179 deduction.
"Singular Use" Business Vehicles:
Business vehicles intended for singular use, such as ambulances or hearses, generally qualify for a full deduction if there is no personal use involved.
Trucks and SUVs Over 6,000lbs GVWR:
Trucks and SUVs with a Gross Vehicle Weight Rating (GVWR) exceeding 6,000 pounds can be eligible for a partial deduction. To qualify, the business use must be more than 50%. However, the deduction limits may vary based on the vehicle type.
Pickup trucks with a full-size (8') cargo bed generally qualify for a Section 179 deduction equal to the percentage of business use. For example, if a $60,000 truck is used 85% for business purposes, the deduction would be calculated as 85% of $60,000, resulting in $51,000.
Heavy SUVs are also eligible for a deduction based on the business-use percentage. However, the maximum deduction for 2023 is capped at $28,900.
It is important to note that the vehicle must be used for business purposes at least 50% of the time. Additionally, if the vehicle is not used for business purposes 100% of the time, the depreciation limits are reduced proportionally according to the corresponding percentage of personal use.
List of Heavy SUV’s and Trucks That May Be Eligible*
*This list is compiled from various government databases and automotive databases which may contain inaccuracies. Please consult with a tax expert before making at decisions about your 2023 taxes
| MAKE | MODEL | APPROX GVW (LBS) |
|---|---|---|
| Audi | Q7 | 6,900 |
| Audi | SQ7 | 6,900 |
| Audi | Q8 | 6,900 |
| Audi | SQ8 | 6,900 |
| BMW | X5 xDrive45e | 7,165 |
| BMW | X6 M50i | 6,063 |
| BMW | X7 xDrive40i | 7,143 |
| BMW | X7 M50i | 7,143 |
| BMW | X7 M50d | 7,143 |
| Bentley | Bentayga | 7,275 |
| Bentley | Bentayga Hybrid | 7,165 |
| Bentley | Bentayga Speed | 7,275 |
| Bentley | Flying Spur | 6,724 |
| Bentley | Flying Spur V8 | 6,724 |
| Bentley | Flying Spur W12 | 6,724 |
| Bentley | Mulsanne | 6,173 |
| Bentley | Mulsanne Speed | 6,173 |
| Bentley | Mulsanne Extended | 6,617 |
| Buick | Enclave Avenir AWD | 6,160 |
| Buick | Enclave Avenir FWD | 6,055 |
| Buick | Enclave Essence AWD | 6,160 |
| Buick | Enclave Essence FWD | 6,055 |
| Escalade | 7,100 | |
| Cadillac | Escalade ESV | 7,300 |
| Cadillac | Escalade Platinum | 7,100 |
| Cadillac | Escalade ESV Platinum | 7,300 |
| Chevrolet | Silverado 2500HD | 10,000 |
| Chevrolet | Silverado 3500HD | 14,000 |
| Chevrolet | Silverado 4500HD | 16,500 |
| Chevrolet | Silverado 5500HD | 19,500 |
| Chevrolet | Silverado 6500HD | 23,500 |
| Chevrolet | Express Cargo Van 2500 | 8,600 |
| Chevrolet | Express Cargo Van 3500 | 9,900 |
| Chevrolet | Express Passenger Van | 9,600 |
| Chevrolet | Suburban | 7,800 |
| Chevrolet | Tahoe | 7,400 |
| Chevrolet | Traverse | 6,160 |
| Chrysler | Pacifica | 6,055 |
| Dodge | Durango | 6,500 |
| Dodge | Durango SRT | 6,500 |
| Dodge | Durango Citadel | 6,500 |
| Dodge | Durango R/T | 6,500 |
| Dodge | Durango GT | 6,500 |
| Dodge | Durango SXT | 6,500 |
| Dodge | Grand Caravan | 6,055 |
| Ford | Expedition | 7,450 |
| Ford | Expedition MAX | 7,700 |
| Ford | F-250 Super Duty | 10,000 |
| Ford | F-350 Super Duty | 14,000 |
| Ford | F-450 Super Duty | 16,500 |
| Ford | F-550 Super Duty | 19,500 |
| Ford | Transit Cargo Van T-250 HD | 9,070 |
| Ford | Transit Cargo Van T-350 HD | 10,360 |
| Ford | Transit Passenger Wagon | 10,360 |
| GMC | Sierra 2500HD | 10,000 |
| GMC | Sierra 3500HD | 14,000 |
| GMC | Sierra 3500HD Denali | 14,000 |
| GMC | Sierra 4500HD | 16,500 |
| GMC | Sierra 5500HD | 19,500 |
| GMC | Sierra 6500HD | 22,900 |
| GMC | Yukon | 7,300 |
| GMC | Yukon XL | 7,800 |
| Honda | Odyssey | 6,019 |
| Infiniti | QX80 | 7,385 |
| Jeep | Grand Cherokee | 6,500 |
| Jeep | Grand Cherokee SRT | 6,500 |
| Jeep | Grand Cherokee L | 6,500 |
| Jeep | Wrangler Unlimited | 6,500 |
| Jeep | Gladiator Rubicon | 6,250 |
| Land Rover | Defender 110 | 7,165 |
| Land Rover | Defender 90 | 7,055 |
| Land Rover | Discovery | 7,165 |
| Land Rover | Discovery Sport | 6,724 |
| Land Rover | Range Rover | 7,165 |
| Land Rover | Range Rover Sport | 7,165 |
| Land Rover | Range Rover Velar | 6,724 |
| Land Rover | Range Rover Evoque | 6,724 |
| Land Rover | Range Rover Evoque R-Dynamic | 6,724 |
| Lexus | LX 570 | 7,000 |
| Lincoln | Aviator | 6,001 |
| Lincoln | Navigator | 7,200 |
| Mercedes-Benz | GLS 580 4MATIC | 6,768 |
| Mercedes-Benz | GLS 600 4MATIC | 6,768 |
| Mercedes-Benz | G 550 4x4 Squared | 7,057 |
| Mercedes-Benz | GLS 580 4MATIC | 6,768 |
| Mercedes-Benz | GLS 600 4MATIC | 6,768 |
| Mercedes-Benz | AMG G 63 4MATIC SUV | 6,724 |
| Nissan | Armada 2WD/4WD | 7,300 |
| Nissan | NV 1500 S V6 | 8,550 |
| Nissan | NVP 3500 S V6 | 9,100 |
| Nissan | Titan 2WD S | 7,300 |
| Porsche | Cayenne Turbo Coupe | 6,173 |
| Porsche | Cayenne Turbo S E-Hybrid Coupe | 6,173 |
| Porsche | Cayenne Turbo S E-Hybrid | 6,173 |
| Porsche | Panamera Turbo S E-Hybrid | 6,244 |
| Tesla | Model X | 6,000 |
| Toyota | Tundra 2WD/4WD | 6,800 |
| Toyota | 4Runner 2WD/4WD LTD | 6,300 |
Depreciation Vs Deduction Under Section 179Depreciation and full deduction are two different methods of accounting for the cost of vehicles under Section 179 of the tax code. Let's explore the distinctions between these approaches: DepreciationDepreciation refers to the gradual reduction in the value of an asset over time due to wear and tear, obsolescence, or other factors. In the context of vehicles, depreciation allows businesses to deduct a portion of the vehicle's cost as an expense over its useful life. This deduction is spread out across multiple years, following the depreciation schedule established by the Internal Revenue Service (IRS). Typically, vehicles are depreciated using the Modified Accelerated Cost Recovery System (MACRS), which assigns specific percentages for each year of the asset's recovery period. Full DeductionA full deduction, on the other hand, allows businesses to deduct the entire cost of a vehicle in the year it is placed into service for business purposes. Section 179 of the tax code provides this opportunity to incentivize business investments by allowing an immediate deduction of the vehicle's cost, rather than spreading it out over several years. The purpose of the full deduction is to stimulate economic growth by encouraging businesses to invest in assets that contribute to their operations. To qualify for a full deduction under Section 179, the vehicle must meet specific criteria defined by the IRS. These criteria can include factors such as the vehicle's weight, purpose, and business-use percentage. Certain types of vehicles, such as those primarily used for work-related transportation or carrying passengers, are more likely to be eligible for a full deduction. In summary, depreciation allows businesses to deduct the cost of a vehicle gradually over its useful life, while a full deduction enables the immediate deduction of the entire vehicle cost in the year it is put into service. The choice between depreciation and full deduction depends on various factors, including the type of vehicle, its purpose, and the business's financial objectives. Consulting with a tax professional or accountant can provide valuable guidance on which approach is most advantageous for a specific business. ConclusionIn conclusion, Section 179 of the IRS tax code provides a significant incentive for businesses to invest in themselves by purchasing, financing, or leasing qualifying equipment and software. This provision allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year, thereby reducing the overall cost of acquiring such equipment. However, it's important to note that while the Section 179 deduction can provide significant tax benefits, the specifics of this deduction can change from year to year. Therefore, businesses should consult with a tax professional or financial advisor to ensure they fully understand the current rules and regulations associated with Section 179. Previous
Previous
An Example Of Cost Segregation In Real EstateNext
Next
1031 Exchanges in Maryland - What You Need To Know |
