What Is the Section 179 Commercial Vehicle Tax Deduction?

As the year ends, your business must consider deductions and tax write-offs related to any purchases made this year. This may include new trucks or vehicles you added to your fleet in 2024.

One deduction you can utilize is Section 179 of the U.S. Internal Revenue Code (“Section 179”). This tax benefit provides an immediate expense deduction, enabling businesses and owner-operators to deduct the total value of qualifying major business purchases (such as vehicles and trailers) to reduce their taxable income for the tax year the asset was acquired and put into service.

How Section 179 Can Help Your Business

Section 179 was initially designed to provide tax relief to small businesses; however, larger companies can also take advantage of this deduction. The primary advantage of Section 179 is that it enables companies and self-employed individuals to deduct the entire cost of qualifying equipment, machinery, or software from their taxable income right away instead of amortizing the expense over multiple years.

When a business makes a significant purchase, like a new truck, it usually has to capitalize and spread the cost of the truck over several years with smaller annual deductions. However, with Section 179, it may be possible to deduct the truck’s total cost from your gross income in just one year, potentially impacting your marginal tax rate and resulting in significant tax savings.

Section 179 was established to assist businesses in their growth and self-investment. It supports the U.S. economy by enabling them to utilize tax savings for immediate equipment purchases instead of delaying them. This could allow you to acquire a new truck for your fleet this year instead of postponing the purchase for one to two years.