What is Section 179?
Section 179 in the IRS tax code allows small to medium businesses to deduct up to the entire purchase amount on select equipment, such as vehicles from their gross income as an expense for the current tax year, providing immediate tax savings.
How does it work for vehicles?
Commercial vehicles that have more than 9 passenger seats or have a fully enclosed drivers compartment and cargo area that is at least 6 feet with no seats in the back such as cargo vans, can qualify for the full deduction of the purchase price under section 179.
Vehicles such as crossovers or SUVS that weigh the manufacturer’s gross weight rating (GVW) of 6,000 lbs. – 14,000 lbs. can qualify for a deduction of up to $28,900 for 2023.
The vehicle can be bought, leased, or financed and it does not have to be completely brand new. It can be used, just “new to you”.
Business requirements to claim Section 159
- The vehicle has to be used more than 50% of the time for business purposes – You cannot take the full deduction if the vehicle is used for business less than 100% of the time.
- The vehicle must be purchased and put into service (ready for use) even if you’re not using it, between January 1st and December 31st of the calendar year you are trying to claim the deduction for. The vehicle will not qualify in a later year if it was initially used for personal purposes, then used for business.
- The vehicle must be purchased in an “arms-length” transaction, financed with qualified leases and loans, and titled in the company name.
Eligible Mercedes-Benz Vehicles
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GLE SUV
GLS SUV
G-Class SUV
Sprinter Van
Metris VanVisit us today to find the perfect vehicle and take advantage of section 179 tax savings for your business!
Please consult your tax professional for more applicability of deduction and whether you qualify for the maximum amount available.
