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Fill Up Deductions For Heavy-Duty Vehicles

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in Small Business Tax,Small Business Tax Deduction Strategies

Q.  In a recent issue, you said that a special tax rule allows a business to deduct $25,000 for an SUV. Is that right?

A.  Yes. Normally, the Sec. 179 depreciation deduction is limited by special rules for “luxury cars.” However, these limits do not apply to vehicles weighing more than 6,000 pounds, such as some heavy-duty SUVs. Nevertheless, the American Jobs Creation Act of 2004 capped the Section 179 deduction for qualified SUVs at $25,000.

Tip: Recent legislative proposals would eliminate this tax break altogether. If Congress wants to deter people from buying gas-guzzling SUVs, the $25,000 Section 179 deduction could be in jeopardy.

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