Section 179 tax deductions allow businesses to deduct the total purchase price of specific qualifying equipment and software bought and used during the tax year. This deduction can be a valuable option for businesses, allowing you to save money on taxes and easily upgrade your equipment and software.

An Overview of Section 179

Businesses that use commercial vans can benefit significantly from the Section 179 tax deductions on purchasing new commercial vehicles.

The IRS allows businesses to deduct the total purchase price of qualifying commercial vans when used for business purposes. This deduction is commonly referred to as the “Section 179 deduction.”

To take advantage of this deduction, you’ll need to file your taxes using Form 4562. This form must be filed with your annual tax return. The amount deducted will depend on the van’s purchase price and the date of purchase.

If you’re considering purchasing a commercial van for your business, take advantage of the Section 179 deduction. It’s a great way to save money on taxes and get the most out of your investment.

What Vehicles Are Eligible?

Your business can become eligible for the deduction if you use the commercial van more than 50% of the time for your business. If the van is used primarily for personal use, you will not be able to take advantage of this deduction. The following vehicles are eligible for the tax deduction:

  • The lighter vehicles covered by Section 179 include cars, crossover SUVs, and small utility trucks.
  • The heavy vehicles include full-size SUVs, commercial vans, and pickup trucks.
  • Other vehicles include work trucks, ambulances, and delivery vans, among others.

What You Need To Know About Section 179 Tax Deduction

  • Businesses can deduct the total purchase price of eligible vehicles used for business purposes, saving thousands of dollars in taxes each year
  • The deduction can be used for new and used commercial vans as long as they are employed for business purposes
  • Businesses can deduct up to $1,080,000 of the purchase price of a van under the Section 179 deduction
  • The deduction can be taken in the year the van is purchased or leased
  • Both business owners and self-employed individuals can leverage the Section 179 Tax deductions
  • The maximum amount businesses can spend on the equipment before the Section 179 deduction is reduced on a dollar-for-dollar basis. This means the regulation is specifically beneficial for small businesses, as larger enterprises with expenditures exceeding the $3,780,000 spending cap will not be eligible for the deduction.

Considerations for Section 179

There are some additional requirements for the Section 179 that businesses should be aware of. First, the maximum deduction is $1 million. This may not be enough for some businesses, especially if they have a lot of expensive equipment.

Second, the equipment must be purchased and placed in service by December 31st to qualify for the deduction. Businesses must plan ahead and ensure the equipment is purchased before the end of the year.

Finally, businesses can only deduct the cost of equipment used for business purposes. Equipment used for personal or investment purposes does not qualify for the deduction.

Section 179 Means Valuable Tax Savings For You

Overall, Section 179 is a valuable tax deduction for businesses that need one or more new commercial vehicles. It can help businesses save money on their taxes and invest in new equipment. Companies should consult with their tax advisor to see if they qualify for the deduction and to determine how much they can deduct. If you’re in the market to upfit your van or configure a new van, contact Commercial Van Solutions today.