Can You Write Off a Car That Weighs More Than 6000 Pounds?

Business vehicle deductions allow companies to recover costs for vehicles used for work. While many vehicle types qualify for tax benefits, specific rules apply to heavier vehicles. Vehicles with a Gross Vehicle Weight Rating (GVWR) exceeding 6,000 pounds often receive unique tax treatment, allowing for larger first-year deductions compared to lighter passenger vehicles.

Qualifying for the Deduction

To qualify for a deduction, a vehicle must meet specific criteria. A heavy vehicle is defined by its Gross Vehicle Weight Rating (GVWR) exceeding 6,000 pounds. This rating represents the maximum allowable weight of the vehicle, including passengers, cargo, and the vehicle itself, and is found on a sticker inside the driver’s side door jamb. Examples include many full-size SUVs, commercial vans, and heavy-duty pickup trucks such as the Chevrolet Suburban, Ford F-150, or Ram 2500.

The vehicle must be primarily used for business purposes. More than 50% of the vehicle’s total mileage must be for business activities. Business use includes travel to client sites, transporting goods, or commuting to temporary work locations. If the vehicle is used for both business and personal travel, only the business portion is deductible. This deduction is available to self-employed individuals and businesses that purchase or finance qualifying vehicles.

Calculating Your Deduction

Once a vehicle qualifies as a heavy vehicle used for business, several methods can be used to calculate the deductible amount, often in combination. Section 179 expensing allows businesses to deduct the full purchase price of qualifying equipment, including heavy vehicles, in the year they are placed in service. For heavy SUVs (those between 6,001 and 14,000 pounds GVWR), the Section 179 deduction is capped at $30,500 for vehicles placed in service in 2024 and $31,300 for 2025. However, certain heavy vehicles over 14,000 pounds GVWR or those specifically designed for non-personal use, like large cargo vans or shuttle vehicles seating more than nine passengers, are not subject to this cap and may allow for a 100% deduction. The overall Section 179 deduction limit for all qualifying property is $1,220,000 for 2024 and $1,250,000 for 2025, with a phase-out if total equipment purchases exceed certain thresholds.

Bonus depreciation offers another method for accelerated depreciation. Businesses can deduct a percentage of the cost of eligible property, including heavy vehicles, in the first year it is placed in service. This deduction is applied after any Section 179 deduction. For vehicles placed in service in 2024, the bonus depreciation rate is 60%, decreasing to 40% for vehicles placed in service in 2025. This rate is scheduled to continue phasing down in subsequent years. Unlike Section 179, bonus depreciation is not limited by a business’s taxable income.

If the entire cost of the vehicle is not expensed through Section 179 or bonus depreciation, the remaining cost can be depreciated over several years using the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, vehicles are generally classified as 5-year property. This method typically employs a 200% declining balance approach, allowing for larger deductions in the earlier years of the vehicle’s life, eventually switching to a straight-line method. A half-year convention usually applies, meaning the vehicle is treated as placed in service in the middle of the year, regardless of the actual purchase date.

Businesses can combine these methods to maximize their first-year deduction. For instance, a business might first apply the Section 179 deduction up to its limit, then apply bonus depreciation to the remaining basis. Any residual cost would then be depreciated over the remaining recovery period using MACRS. This strategic combination can significantly reduce the taxable income in the year the heavy vehicle is acquired and placed into business service.

Maintaining Records for Substantiation

Meticulous record-keeping is essential for substantiating vehicle deductions, especially for heavy vehicles, and is crucial for navigating potential tax audits. The Internal Revenue Service (IRS) requires detailed documentation to prove both the vehicle’s business use and incurred expenses. Without adequate records, the IRS may disallow claimed deductions, leading to additional tax liabilities, interest, and penalties.

Required documentation includes the vehicle’s purchase records, such as the bill of sale and loan documents, along with clear proof of its Gross Vehicle Weight Rating (GVWR). The GVWR can typically be found on the manufacturer’s sticker, often located on the driver’s side door jamb. Detailed mileage logs are also important. These logs must include the date of each trip, the destination, the business purpose, and the starting and ending odometer readings for both business and total miles driven. Contemporaneous records, meaning entries made at or near the time of the trip, are generally required by the IRS.

Beyond mileage, businesses must keep records of all expenses related to the vehicle’s operation. This includes:
Receipts for fuel
Maintenance
Repairs
Insurance premiums
Registration fees

These records, combined with mileage logs, help determine the business-use percentage of the vehicle, calculated by dividing business miles by total miles driven. Taxpayers should retain these records for at least three years from the date the tax return was filed, though some tax professionals recommend keeping them for up to seven years to cover various audit periods.