Heavy Truck Tax Deduction for Your Business

Significant tax deductions are available for businesses that purchase heavy vehicles, presenting a tax planning opportunity. For small businesses, independent contractors, and other commercial enterprises, understanding these tax provisions can lead to substantial financial benefits. The tax code provides specific incentives for placing heavy trucks, vans, and SUVs into service.

These benefits allow for the accelerated write-off of a vehicle’s cost, which can improve a company’s cash flow and reduce its overall tax liability for the year of purchase.

Defining a Qualifying Heavy Vehicle

A vehicle must meet specific criteria to be considered “heavy” for tax deduction purposes. The primary requirement is a manufacturer’s Gross Vehicle Weight Rating (GVWR) of more than 6,000 pounds. The GVWR represents the maximum allowable total weight of a vehicle when fully loaded with passengers and cargo. Business owners can find this rating printed on a sticker located on the driver’s-side door jamb.

Many types of vehicles meet this weight requirement, including heavy sport utility vehicles (SUVs), full-size pickup trucks, and larger cargo or passenger vans. It is important to verify the specific GVWR for the exact model and configuration of the vehicle, as different versions of the same truck may have different ratings.

Beyond the weight rating, another factor for qualifying is the vehicle’s use in the business. The vehicle must be used more than 50% of the time for business purposes. To determine this, a business divides the total miles driven for business by the total miles driven during the year. Only the business-use portion of the vehicle’s cost is eligible for these deductions, and record-keeping of mileage is necessary to substantiate the claim.

The Section 179 Deduction

The Internal Revenue Code provides a tool for businesses through Section 179, which allows for the immediate expensing of the full purchase price of qualifying equipment. Instead of depreciating the asset over several years, a business can elect to deduct the cost in the year the property is placed in service. For the 2025 tax year, the maximum total deduction a business can take under Section 179 is $1,250,000. This limit begins to phase out on a dollar-for-dollar basis if the total cost of property placed in service exceeds $3,130,000.

A significant advantage for heavy vehicles is that they are not subject to the same depreciation limits imposed on standard passenger automobiles. For 2025, while certain heavy SUVs have a specific Section 179 deduction limit of $31,300, other heavy vehicles like cargo vans or trucks with a cargo area of at least six feet may qualify for the full deduction, up to the overall business limit.

Consider a landscaping business that purchases a new heavy-duty pickup truck for $80,000 in 2025. The truck has a GVWR over 6,000 pounds and is used 100% for the business. The business can elect to use Section 179 to deduct the full $80,000 purchase price on its 2025 tax return, assuming the deduction does not exceed the business’s net taxable income for the year.

The total Section 179 deduction claimed cannot create a business loss. The deduction is limited to the aggregate amount of taxable income from the active conduct of any trade or business during the tax year. Any amount that cannot be deducted due to this income limitation can be carried forward to the following tax year.

Bonus Depreciation Rules

Bonus depreciation is another tax incentive that allows businesses to accelerate the depreciation of qualifying assets. It permits the deduction of a certain percentage of an asset’s cost in the first year it is placed in service. For property placed in service in 2025, the bonus depreciation rate is 40%. This percentage is part of a scheduled phase-down that will see the rate decrease to 20% in 2026 and to 0% in 2027, unless Congress changes the law.

A difference from the Section 179 deduction is that bonus depreciation is not limited by a business’s taxable income. This means a business can claim bonus depreciation even if it results in a net operating loss for the year. Taxpayers also have the option to elect out of taking bonus depreciation on an asset-class-by-asset-class basis if they choose.

Businesses can use both Section 179 and bonus depreciation on the same asset. A common strategy is to apply the Section 179 deduction first, up to its applicable limit. Then, the business can claim bonus depreciation on the remaining cost of the vehicle. For example, if a business buys a qualifying heavy SUV for $70,000 in 2025 and uses it 100% for business, it could first take the $31,300 Section 179 deduction. On the remaining $38,700, it could then claim 40% bonus depreciation, resulting in an additional $15,480 deduction in the first year.

The remaining basis of the vehicle after both Section 179 and bonus depreciation would then be depreciated over its regular recovery period. The rules apply to both new and used vehicles, as long as the vehicle is new to the taxpayer.

How to Claim the Deduction

Information and Form Preparation

To claim deductions for a heavy vehicle, a taxpayer must gather the vehicle’s total purchase price, the date it was placed in service, and the business-use percentage for the year. With this data, the taxpayer completes IRS Form 4562, “Depreciation and Amortization.”

On this form, the taxpayer will elect the Section 179 deduction and report any special depreciation allowance for bonus depreciation.

Filing Process

Form 4562 is not filed on its own but must be attached to the business’s main annual income tax return. The primary return depends on the business’s legal structure.

A sole proprietorship or single-member LLC attaches Form 4562 to Schedule C (Form 1040). A corporation includes Form 4562 with its Form 1120 tax return, while partnerships and multi-member LLCs attach it to Form 1065.