Section 179 Benefits

Section 179 Tax Deduction FAQ for Business Owners

A work vehicle is a business asset, not just a way to get from one job site to the next. Selecting a pre-owned model can help businesses stretch their budget further by keeping acquisition costs in check, while still delivering the capability, durability, and utility the job demands. When paired with Section 179 of the IRS tax code, that value proposition can become even stronger, allowing eligible businesses to deduct qualifying vehicle purchases in the same year they are placed into service rather than depreciating them over time.

Section 179 is a tax provision that allows businesses to expense qualifying equipment purchases, including vehicles, up front. Instead of spreading deductions over multiple years, eligible businesses may be able to deduct a large portion of the purchase price in the same year the vehicle is first used for business. This can help improve cash flow and make it easier to invest in necessary tools sooner.

Yes. Section 179 can apply to used vehicles, as long as the vehicle is new to your business. In other words, you cannot claim the deduction on a vehicle you already owned, but you can potentially claim it on a used truck, SUV, or van purchased from a dealership. At Five Star Auto, we can help you find a vehicle that matches your needs without the higher new-car premium.

To qualify for the tax advantage provided by Section 179, a vehicle must be used for business purposes more than 50 percent of the time. If business use later drops below that threshold, part of the deduction may be recaptured. As such, accurate mileage and usage records are strongly recommended.

Section 179 treats vehicles differently based on their size and classification. Passenger cars and smaller crossovers are subject to strict first‑year deduction limits, which significantly cap how much can be written off. Larger vehicles more commonly associated with work use—like trucks, vans, and heavier SUVs—often offer far more flexibility. Gross Vehicle Weight Rating (GVWR) is a key factor. Vehicles with a GVWR above 6,000 pounds are generally more favorable candidates for Section 179.

Section 179 does have annual limits that apply across all qualifying equipment purchases, not just vehicles. The deduction also begins to phase out once total equipment spending exceeds a certain threshold. Passenger vehicles face much lower caps than trucks and vans, which is why many contractors and service‑based businesses prioritize heavier vehicles when planning purchases.

For the 2025 tax year, Section 179 allows eligible businesses to deduct up to $1,220,000 in qualifying equipment purchases. The deduction begins to phase out once total qualifying purchases exceed $3,050,000. Because limits and thresholds can change year to year, be sure to confirm current figures with a tax professional.

To qualify for Section 179 deductions, a vehicle must be placed into service during the same tax year the deduction is claimed. That means it must actually be used for business—not just purchased—before the end of the year.

By deducting more of the vehicle's cost up front, businesses may reduce taxable income in the same year of purchase. This can free up capital for other needs such as hiring, equipment upgrades, or expanding operations.

Five Star Auto in Maryville, TN, offers a rotating selection of used trucks and SUVs that appeal to business owners looking for capability and value. While we can't provide tax advice, our team can help you explore work‑ready vehicles that may align with Section 179 guidelines.

Reach out to us today for more information about our vehicle selection and available used-car financing opportunities. If you'd like a closer look at any of the models in our inventory, we invite you to visit us for a test drive. We'll be happy to show you around.