Tax Benefits For Buying Commercial Vehicles | Red Wing, MN

    

If you own a small business, you may already know a thing or two about tax deductions. There are a number of ways to save on taxes with business-related purchases-even when it comes to buying commercial vehicles. The Section 179 deduction is a useful tool worth knowing about that can help you and your small business get the mobility you need while saving on your taxes.


What is a Section 179 Deduction?

The Section 179 of the IRS Code changes the way that small businesses can take tax deductions from business assets, such as commercial vehicles. Before the Section 179 deduction existed, businesses could only take tax deductions based on depreciation over a period of time. Now, with the Section 179 deduction, businesses can take a tax deduction for the full cost of an asset at the time of purchase. 


How Does a Vehicle Qualify?

Only vehicles that have a gross weight over 6,000 pounds are eligible for a Section 179 deduction. In order to qualify for a Section 179 deduction, a commercial vehicle must be purchased and put to use in the year that the business owner claims the deduction.  


What This Means for Buying Commercial Vehicles

Most commercial vehicles, both passenger and cargo, can qualify for the Section 179 deduction, which means that opting for a commercial vehicle for your business could end up saving you significant money. Ask your Ford dealer for more information about the qualifying commercial vehicles.


How to Take a Section 179 Deduction

Go ahead and purchase a qualifying commercial vehicle and begin using it for your business. Keep all records of the purchase, of any related costs, of the date you began using it, and of the mileage. When tax season comes around, you will need to meet with a tax professional who can help you sort through this information to get the most from the Section 179 deduction.


If you have questions about the Section 179 deduction, or you want to look at some commercial vehicle options, contact us at Red Wing Ford. 

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