Maximize Your Savings: Leverage Business Vehicle Tax Deductions

If you're curious about how your company can claim an additional tax deduction, business vehicles are a fantastic way to increase your productivity while writing off the expense. Join the Jim Ellis Commercial team as we explain the current rules of the business tax deduction for vehicle purchases, explore the money-saving opportunities for vehicles over 6,000 pounds,¹ and discuss how you can determine the Section 179 deduction vehicle list in 2025.

What Is Bonus Depreciation and the Section 179 Tax Credit for Businesses and Fleet Vehicles?

• Section 179: An IRS code that enables businesses to expense the price of qualifying equipment, including new or used commercial and fleet vehicles, purchased during the tax year the vehicle was put into service
• Bonus Depreciation: An additional first-year deduction that helps businesses deduct additional depreciation costs beyond normal depreciation allowances

Under the new phase of Section 179, businesses now have up to a $2.5 million automotive deduction until reaching the threshold of $4 million.¹ For instance, if your expenses exceed four million dollars, the maximum deduction starts to decrease by $1 for every dollar over the limit.¹

In years past, the bonus depreciation law and Section 179 of the U.S. tax code set the business tax deduction for a vehicle to decrease by 20% annually starting at the end of 2022. Luckily for business owners, the 100% automotive deduction has been restored for 2025 (for eligible business assets placed into service after January 19, 2025).¹

Phase-Out Tax Deduction: Business Vehicles Qualify for These Deductions

For the past few years, the 100% bonus depreciation has implemented a preplanned decrease of 20% per year. The expectation was that 2025 would continue this plan. However, following the One Big Beautiful Bill Act signed on July 4, 2025, the 100% bonus depreciation has been revived for qualifying business owners.¹ Here is a brief history of the depreciation percentages, followed by projected future rates.

• 2023: $1,160,000 maximum Section 179 deduction + 80% bonus depreciation
• 2024: $1,220,000 maximum Section 179 deduction + 60% bonus depreciation
• 2025: $2,500,000 maximum Section 179 deduction + 100% bonus depreciation¹
• 2026: $2,500,000 maximum Section 179 deduction (pending inflation-based changes) + 100% bonus depreciation anticipated¹

If you've been excited about saving 100% in vehicle tax right off the bat, you'll be pleased to know that these changes are permanently written into the tax code and are unlikely to disappear anytime soon. The 100% bonus depreciation for business vehicle purchases should also remain fixed going forward, pending policy and inflation shifts. Now is an excellent time to purchase a commercial vehicle for your business.

How To Claim and Maximize Commercial Vehicle Tax Benefits

Regarding how to claim a tax deduction, business vehicles can be written off by filling out IRS Form 4562. To fill out this form in its entirety, you will need access to the following information:

• Total expenses, including acquisition costs, maintenance, repairs, and lease payments
• The amount or level the vehicle was used for business purposes during the tax year
• Date of vehicle purchase and first use
• Reason for expensing this vehicle purchase

Optimize your business vehicle write-off and gain the 100% bonus depreciation deduction by buying commercial or fleet models this year.

Who Qualifies for the Section 179 Tax Credit for Businesses and Fleet Vehicles?

Nearly any business that uses vehicles for commercial purposes more than 50% of the time can claim this deduction. The amount of business use for a vehicle can impact the deduction scale.

With these new Section 179 percentages, how can companies still get the maximum possible tax deduction? Business vehicles continue to fall under the category of "depreciable assets," which means your company can still qualify for Section 179 and bonus depreciation deductions. Under the OBBB law, the maximum is $2.5 million per year, with phase-outs beginning at $4 million.¹

List of Vehicles That Qualify for Section 179 in 2025

Unfortunately, there is no IRS list of vehicles over 6,000 pounds, nor does the IRS publish a complete list of Section 179-eligible models, so you'll need to compare your current business and fleet vehicles to these categories to see which deductions apply.

Here is some information about tax breaks for vehicles over 6,000 pounds, under 6,000 pounds, and over 14,000 pounds.

• Tax Write-Off for Vehicles Over 6,000 Pounds: Pickup trucks (beds exceeding 6 feet), cargo vans, and commercial vehicles have up to a $2.5 million yearly limit.¹
• Tax Write-Off for Vehicles Under 6,000 Pounds: Have up to a $12,200 deduction limit with up to $8,000 bonus depreciation available.¹

Here are further stipulations for commercial vehicles and Section 179:

• The vehicle must be used for business purposes more than 50% of the time.
• New and used vehicles can qualify for Section 179 as long as the vehicle is "new to you."
• You cannot gain a Section 179 deduction worth more than your business's income.
• It may be possible to carry over an unused deduction into future tax years.

Get Your Tax Deduction for Business Vehicles at Jim Ellis Commercial

We know this page is dense; commercial vehicle tax benefits are complex, and it can be difficult to understand the current rules and regulations. But in a nutshell: Business vehicles do qualify for Section 179 and bonus depreciation deductions. They will continue to do so for the foreseeable future.

You can get the biggest deductions possible when you shop our inventory at Jim Ellis Commercial. Our selection of new and used commercial and fleet vehicles can increase your company's productivity while reducing its overall expenses.

Frequently Asked Questions

What is a commercial vehicle for tax purposes?

A commercial vehicle that is used for business purposes more than 50% of the time typically qualifies for a tax deduction. Business vehicles can be purchased new or used, though specific restrictions apply to used cars under Section 179 and bonus depreciation laws. Talk with the Jim Ellis Commercial team to find answers for your particular company and commercial or fleet vehicle situation.

What vehicles qualify for bonus depreciation?

Any business vehicle can qualify for bonus depreciation, but the percentage of this automotive deduction decreases with each passing year, according to the current IRS tax code. Commercial or fleet models purchased in 2024 qualified for 60% bonus depreciation.¹ Those purchased in 2025 will be eligible for the restored 100% bonus depreciation, which is now permanently coded into tax law.¹

Can I deduct the purchase price of a vehicle for my business?

If the commercial or fleet vehicle you purchase weighs more than 6,000 pounds, you should be eligible for a generous business vehicle write-off. According to the 6,000-pound vehicle tax deduction, the business expense cap is $2.5 million, with an upper threshold of $4 million.¹ Additionally, vehicles of over 14,000 pounds are not subject to Section 179 limitations.¹

¹This information is not verified by the official manufacturer and shall serve solely as unofficial general information. For details, visit: https://www.congress.gov/bill/119th-congress/house-bill/1/text