SECTION 179 TAX DEDUCTION

You can get up to $1,160,000 in tax savings when purchasing vehicles from Waconia Dodge Chrysler Jeep Ram and taking advantage of the IRS Section 179 Tax Deduction.

What is Section 179 IRS Vehicle Deduction?

It’s no secret that the federal income tax system is complicated, but one thing you might not know about it? Section 179 of this code allows businesses to deduct the full amount of their purchases from gross revenue. The United States government created this incentive to encourage companies to invest in themselves.

Suppose your company buys (or leases) specific equipment and/or software worth more than $25000 in total value during any given year. In that case, they will be able to take home all costs related to those items instead of being taxed at regular rates—which can add up over time.

Vehicle purchases are among the most popular uses of Section 179. This is because the deduction allows businesses to purchase large SUVs and deduct their taxes all at once. This created abuse even though the law was initially written with good intentions. This IRS tax deduction has been known as “The Hummer Tax Loophole for years.”

Today’s version still allows you some room under these limits while still taking advantage of Section 179 when buying vehicles intended as part of your business activity exclusively.

What is The Tax Deduction Limit?

The limit of the amount of tax deduction is $1,160,000. This deduction is good for new and used CDJR vehicles. The equipment must be financed or purchased to take the deduction for that tax year.

What is the spending cap on equipment purchases?

The spending cap on equipment purchases is $4,050,000. This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar-for-dollar basis. This spending cap makes Section 179 a true “small business tax incentive.”

What is The Bonus Depreciation?

The Bonus Depreciation is 100%. Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation is available for new equipment only. Please check with your tax professional to understand which equipment qualifies for Bonus Depreciation.

Section 179 (Example Calculation)

First Year Write Off …………………………. $1,160,000

80% Bonus First-Year Depreciation … $32,000 (updated to 100% via Tax Cuts & Jobs Act)

Normal First Year Depreciation …………… $0 (20% in each of 5yrs on remaining amount)

Total First Year Deduction …………………. $1,192,000 ($1,160,000 + $32,000 + $0)

Cash Savings …………………………………. $417,200 ($1,192,000 x 35% tax rate)

Equipment Cost after Tax …………………… $782,800

The above example is an overall “Simplified” view of the Section 179 Deduction. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please visit www.section179.org or talk to your tax advisor.

How Do I Qualify For Section 179 Deduction?

If you own a car and use it for business, the IRS says that’s ok. But, there are limits on how much money can be depreciated and deducted from your tax bills. The deduction limit is $1,160,000 if the vehicle is used by yourself or other passengers. (In addition to what is paid at purchase time (which could add up!).

Trucks with Gross Vehicle Weight (GVW) over 6000 pounds are eligible to write-off 100% of the cost because these vehicles have specialized usage rather than standard, day-to-day usage.

The Internal Revenue Service announced that certain vehicles, such as SUVs and Crossovers with a gross vehicle weight rating of more than 6000 pounds, but not more than 14,000 pounds, are eligible for deducting up to $25,000 in 1st-year depreciation.

Note: The deduction for business vehicles is the same regardless of whether it is a lease, purchased, or financed.

For more information please visit Section179.org.

Which CDJR Models Qualify for IRS Section 179 Deduction?

Waconia Dodge Chrysler Jeep Ram host an impressive inventory full of models that could potentially qualify for Section 179. Speak with a sales representative to inquire about qualifying Section 179 pickup trucks, such as the Ram 1500 & 1500 Classic, and the Jeep Gladiator trucks to be used to transport heavy materials or a Ram 2500 & 3500 along with the Ram 3500, 4500 & 5500 Chassis Cab models to carry your workers and equipment even over the rockiest terrain. Ram Vans like the Ram ProMaster®, and the ProMaster City® Cargo Van also qualify for Section 179. You can also write off a qualifying Section 179 SUV and you can take your business to the next level. You could even claim the Section 179 tax break on a Jeep Grand Cherokee, Jeep Cherokee 4xe, and the Jeep Wrangler to turn your brick-and-mortar business into a mobile empire! Here at Waconia Dodge Chrysler Jeep Ram, we help local businesses grow by offering the best deals on commercial vehicles and informing every business owner about the Section 179 Tax Deduction in the Waconia, MN-area. Learn more about which vehicles are eligible for Section 179 with us today!

Waconia Dodge Chrysler Jeep Ram has a wide selection of Vehicle Lease Deals and Finance Offers in Waconia, MN! Stop by our dealership today for a test drive.

Additional Section 179 Deduction Rules To Know

Titles of the vehicles should be in the company name. For example, if you own a truck that’s been used for business 50% of its time and has an expected value (EV) over ten years, then claiming Section 179 would reduce depreciation by 5%. This means more money coming into your pocket.

It may seem complicated. First, most taxpayers need to provide basic information about how their vehicle was primarily used – whether they work or not doesn’t matter. And, they need to share what EV they expect from this asset over ten years; this easy input will return essential details such as applicable limits on personal/business percentage use.

Note: This is not considered tax advice or tax guidance and is purely informational. Please consult your tax professional for the exact rules regarding IRS Section 179 deduction, how it can reduce the amount of taxes, associated laws, and qualifying vehicles.

Buy Your Next Business Vehicle at Waconia Dodge Chrysler Jeep Ram Today!

Interested in a new CDJR SUV, Truck, or Van for your business? You can use IRS Section 179 Deduction on many different CDJR models under those body styles. Shop our selection of new CDJR models today in Waconia, MN and stop by Waconia Dodge Chrysler Jeep Ram for a test drive!