Section 179
Section 179 Deduction for Business Vehicles
As a business owner, finding ways to save money and reduce your tax liability is always a top priority. That's why it's important to take advantage of Section 179 of the current IRS tax code if you're planning on adding a new Ford vehicle to your fleet. This is a fantastic opportunity to immediately deduct the entire purchase price of the vehicle, which could mean thousands of dollars in savings for your business. And the best part? Qualifying Ford trucks and work vans with a GVWR exceeding 6,000 pounds are eligible for full depreciation during the first year of ownership when used solely for business purposes. So don't miss out on this valuable tax benefit - take a look at the list of eligible Ford vehicles and start planning your next purchase!
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Get Instant Tax Relief with Section 179
Maximize Your Business Growth with Immediate Expense Deductions
What is Section 179?
Businesses have a great opportunity to deduct expenses for purchases of depreciable business equipment immediately when they use Section 179 of the U.S. Internal Revenue Code. Business owners can deduct the entire purchase price instead of capitalizing and depreciating the item over time. In order to lower current-year tax liabilities and support businesses, this deduction is essential.
Benefits of Section 179
Instead of spreading out deductions over several tax years, businesses can reduce their tax burden for the current year by utilizing this deduction. The highest deduction allowed by Section 179 for 2022 is $1,080,000, with a $2,700,000 cap on the value of properties purchased. Choosing to claim an immediate expense deduction, as opposed to capitalizing and depreciating an asset over time, allows firms to obtain immediate tax benefit.
Who Can Benefit from Section 179?
It is especially recommended that small business owners use Section 179 to finance the purchase of new equipment in order to expand their operations. Cars, office supplies, business machinery, and computers are all covered under Section 179. For business owners buying beginning equipment, this quick deduction can offer substantial tax benefits. The equipment must fulfill the requirements listed in Section 179 of the tax code in order to be eligible for the deduction.
Ford Vehicles Qualifying for Section 179
Vehicles categorized as "heavy" will be eligible for a $28,900 tax deduction under Section 179 in 2023. Prior to the end of 2022, these cars were eligible for 100% bonus depreciation. Nevertheless, this extra depreciation rate will drop to 80% as of 2023.
- Ford Expedition 7,450 lbs.
- Ford Expedition Max 7,700 lbs.
- Ford F-250 Super Duty 10,000 lbs.
- Ford F-350 Super Duty 14,000 lbs.
- Ford F-450 Super Duty 16,500 lbs.
- Ford F-550 Super Duty 19,500 lbs.
- Ford Transit Cargo Van T-250 HD 9,070 lbs.
- Ford Transit Cargo Van T-350 HD 10,360 lbs.
- Ford Transit Passenger Wagon 10,360 lbs.
- Ford Transit Passener Wagon 10,360 lbs.
For the qualifying vehicle to be eligible for the Section 179 deduction, it must be purchased and put into operation between January 1, 2023, and December 31, 2023. In the first year of operation, the vehicle must be used, depending on mileage, for commercial purposes at least 50% of the time. The portion of the expense that can be written off if your truck is utilized for business purposes alone would be the percentage that is used for personal usage. All businesses that finance or buy less than $2 million in business equipment in the 2022 tax year should be eligible for the Section 179 deduction under this tax legislation.
What Vehicles Get the Largest Tax Savings?
As usual, for precise information on Section 179 and automobiles, speak with a tax expert if you have any issues.
Trucks having a GVWR of more than 6,000 pounds and a bed length of at least six feet are the vehicles that qualify for the biggest tax savings (i.e., Ford F-150/F-250/F-350). The maximum first-year depreciation deduction of up to the entire purchase price is applicable to these new Ford automobiles. SUVs and trucks that have a bed length under six feet and a gross vehicle weight rating (GVWR) over 6,000 pounds (such as the Ford F-150 SuperCrew with a five and a half-foot bed, the Explorer, and the Expedition) are eligible for a maximum first-year depreciation deduction of up to $25,000 of the entire purchase price plus 60% of the remaining balance.
NOTE: The information supplied here is provided by your local Ford Dealer as a public service to its customers. It should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability. Individual tax situations may vary. Federal rules and tax guidelines are subject to change. For more information about the Section 179 expense write-off or other business vehicle expense write-offs, you should consult your tax advisor for complete rules applicable to your transaction and visit the Internal Revenue Website at www.irs.gov.
This analysis applies only to vehicles placed in service in the United States after December 31, 2015, and by December 31, 2023, with no written binding contract for acquisition in effect before January 1, 2023. The aggregate deduction of $500,000 under Internal Revenue Code Section 179 is most beneficial to small businesses that place in service less than $2,000,000 of "Section 179 property" during the year (vehicles and other business property).
IRC Section 280F(d)(7(B) requires that the limitation under IRC Section 280F(a)(1) be adjusted annually, based on the CPI automobile component for October of the preceding year. The IRS officially announced the Section 280F depreciation limits in Revenue Procedure 2017-23. The passenger automobile imitation is $11,160, the trucks/vans under 6,000 lbs. limitation is $11,560. SUV's over 6,000 pounds GVWR are limited to a deduction of $25,000 under Section 179(b)(5) with the remaining basis in the vehicle depreciated under normal MACRS methods. The expensing restrictions under Section 280F do not apply to vehicles that are considered to be "qualified non-personal use vehicles" (QNUVs). A QNUV is a vehicle that, by its nature or design, is not likely to be used more than a de minimis amount for personal purposes. For more information, see Income Tax Reg., Sec. 1.280F-6(c)(3)(iii), Income Tax Reg. Sec. 1.274-5T(k), and Revenue Ruling 86-97, and contact your tax advisor for details. Consult your tax advisor as to the proper tax treatment of all business-vehicle purchases.
All prices exclude taxes, title, and registration and document fees. Not all buyers will qualify for all offers. Above total savings are examples of specific vehicles; total savings varies by vehicle. (Individual Vehicle Incentives and Offers go here) Available at participating dealers only. For all offers, take new retail delivery from Oregon Ford dealer stock by 12/31/2020.