How to Claim the Section 179 Vehicle Write Off

The Section 179 deduction is a provision in the Internal Revenue Code that allows a business to treat the cost of qualifying property as an immediate expense rather than capitalizing it over time. This can result in a significant tax saving in the year of purchase. While this benefit applies to various business assets, its application to vehicles involves a specific set of rules. Understanding these regulations is important for any business owner looking to leverage this deduction for a vehicle purchase.

Vehicle Qualification Requirements

A vehicle must meet two primary tests to be eligible for the Section 179 deduction. The first is the business-use test. To qualify, a vehicle must be used more than 50% of the time for qualified business purposes during the year it is first placed in service. This percentage is determined by dividing the total miles driven for business by the total miles driven for all purposes during the year.

Qualified business use includes tasks directly related to the operation of the business, such as driving to meet clients, traveling between job sites, or making deliveries. The Internal Revenue Service (IRS) explicitly defines commuting—travel between one’s home and primary place of business—as personal use. Detailed record-keeping of mileage is necessary to substantiate this business-use percentage.

The second requirement relates to the vehicle’s Gross Vehicle Weight Rating (GVWR), which is the maximum operating weight of a vehicle as specified by the manufacturer. This rating can be found on a sticker inside the driver’s side door jamb. The IRS separates vehicles into categories based on this rating, which impacts the potential deduction amount.

Vehicles are classified as either “light” or “heavy.” Light vehicles, referred to as passenger automobiles, are those with a GVWR of 6,000 pounds or less. Heavy vehicles are those with a GVWR over 6,000 pounds. Both new and used vehicles can be eligible, provided they are new to the taxpayer and their business.

Calculating the Deduction Amount

The maximum allowable deduction is governed by dollar limits that differ based on the vehicle’s weight class. For certain heavy sport utility vehicles (SUVs) and crossovers with a GVWR over 6,000 pounds placed in service in 2025, the maximum Section 179 deduction is capped at $31,300. In contrast, light vehicles with a GVWR of 6,000 pounds or less are subject to much lower limits, referred to as the luxury auto depreciation limits.

The overall Section 179 deduction limit for all assets placed in service during 2025 is $1,250,000. This deduction begins to phase out on a dollar-for-dollar basis if the total cost of property purchased exceeds $3,130,000.

The final deduction amount must be adjusted based on the actual percentage of business use. If a vehicle is used for business 80% of the time, the business can only claim 80% of the maximum allowable deduction for that vehicle type. For example, if a qualifying heavy SUV was used 80% for business, the maximum deduction would be $25,040 (80% of the $31,300 limit).

Information and Forms for Claiming the Deduction

To claim the Section 179 deduction for a vehicle, a taxpayer must gather specific information. The necessary details include:

• The vehicle’s total purchase price
• The exact date it was placed in service for the business
• The total number of miles driven during the tax year
• The total number of miles driven specifically for business purposes

This information is reported to the IRS on Form 4562, titled “Depreciation and Amortization.” In Part I of Form 4562, the taxpayer will describe the vehicle, enter the total cost, and list the specific dollar amount they are electing to expense. This elected amount cannot exceed the calculated maximum based on the vehicle’s type and business-use percentage.

The Filing Process and Post Filing Considerations

With a completed Form 4562, the final step is to attach it to the business’s main federal income tax return. The specific primary return depends on the business structure; for a sole proprietor or single-member LLC, this would be Schedule C (Form 1040), while a corporation would attach it to Form 1120.

After filing, it is important to keep detailed documentation, most notably a contemporaneous mileage log, to support the business-use percentage claimed on the tax return. These records would be necessary to substantiate the deduction in the event of an IRS examination or audit.

A post-filing consideration is the potential for deduction recapture. If the business use of the vehicle drops to 50% or less in any year during the vehicle’s recovery period (five years for vehicles), the IRS requires the taxpayer to “recapture” a portion of the previously claimed deduction. This means the taxpayer must report part of the initial tax benefit back as business income.