Get tax benefits by buying business vehicles now with Section 179
October 15, 2024
As the year winds down, many business owners are looking for smart ways to reduce their taxes while investing in their operations. One of the best strategies? Leveraging Section 179 of the IRS tax code to deduct the full purchase price of qualifying business vehicles and equipment before the year ends.
What is Section 179?
Section 179 allows businesses to deduct the cost of certain equipment or vehicles in the year they are purchased, rather than spreading out the deductions over time. But there’s a deadline—you need to make your purchases before December 31 to qualify. Here’s why Q4 is the perfect time to invest.
Immediate Tax Deduction
With Section 179, a business may deduct the cost of qualifying vehicles and equipment, up to a $1,160,000 limit in 2024. There’s a spending cap of $4,050,000, and SUVs, trucks, and vans between 6,000 and 14,000 pounds have a specific deduction limit of $28,900.
Improve Business Efficiency
Upgrading your fleet or equipment isn’t just a tax move—it’s a business strategy. Newer vehicles often offer better fuel efficiency, safety, and reliability. If you’ve been spending too much on repairs for outdated equipment or vehicles, this is an opportunity to modernize and cut long-term operational costs.
Bonus Depreciation
In addition to Section 179, you may benefit from bonus depreciation, which allows you to write off 80% of an asset’s cost in the first year it’s put into service. If you exceed Section 179’s deduction limits, bonus depreciation offers additional savings, but the rate will drop next year.
Year-End Deals and Financing
As the year ends, dealerships often offer promotions on current models, making it a great time to buy vehicles. Many financing options are available, allowing you to spread out payments while still benefiting from a tax deduction on the full purchase price.
To claim the Section 179 tax deduction for 2024, your vehicles or equipment must be purchased, financed, or leased and in use by December 31, 2024. Missing the deadline could mean missing out on these valuable tax benefits for the 2024 tax year.
Upgrading your business vehicles and equipment with Section 179 may not only reduce your tax burden but help improve your operations. If your fleet needs an upgrade, act now and explore financing options at Redwood Credit Union and fleet procurement at RCU Auto Services.*
Redwood Credit Union offers flexible financing for business vehicles and equipment. Learn more.
Always consult a tax professional to confirm eligibility for Section 179 deductions.
*RCU Auto Services is a wholly owned subsidiary of Redwood Credit Union.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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