Tax Deductions for Mobility Vehicles: IRS Section 179
If you’re in the business of transporting people from place to place, you may qualify for a major deduction under Section 179 of the IRS tax code. Section 179 was created to encourage businesses to buy their own equipment. It’s especially useful for small businesses, but large businesses can take advantage of it, too. Basically, it works like this: If you purchased, financed or leased certain types of equipment in 2018 – new or used – then you can deduct the full purchase price of that equipment for up to $1,000,000!
The maximum deductions available for vehicles can vary year by year, but “work vehicles” (that is, vehicles that are unlikely to be used for personal purposes) will almost always qualify for a full Section 179 deduction. This includes taxis, transport vans and other vehicles used to specifically transport people.
If you’d like to take the deduction for tax year 2018, then your vehicle must be financed or purchased and placed into service between January 1, 2018 and December 31, 2018. (Important note: even if a vehicle was not put on the road in 2018, it still qualifies as “placed into service” if it was ready and available for use.) This year, a 100% bonus depreciation is also available for new and used equipment – and by “new,” that means “new to you.” Section 179 is a major incentive for mobility-related businesses that have been holding off on purchasing or leasing new or additional vehicles to their fleet. Contact a sales professional today to learn more!