Section 179 Tax Benefits
For a growing business, when you acquire a work van can matter nearly as much as which one you choose. Section 179 of the federal tax code allows businesses to deduct all or part of the cost of a qualifying vehicle in the year it is placed into service, rather than spreading that deduction across several years. For Long Island owners adding a new Mercedes-Benz Sprinter to their fleet, that timing can keep capital working elsewhere while the van goes straight into service.
Vehicle Guidelines
Eligibility comes down to three things: weight, ownership, and how the vehicle is used.
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Heavy sport utility vehicles with a Gross Vehicle Weight Rating between 6,000 and 14,000 pounds are subject to an expensing limit. That limit does not apply to vehicles designed to seat more than 9 passengers, vehicles with a cargo area of at least 6 feet that is not readily accessible from the passenger compartment, or vehicles that fully enclose the driver compartment and load-carrying device.
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Qualifying vehicles may be purchased new or pre-owned. Leased vehicles, and vehicles you intend to lease to others, do not qualify.
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The vehicle must be used for business purposes at least 50% of the time. Any personal use reduces the depreciation you may deduct by the corresponding percentage.
Several more specific rules govern which property is eligible, so review your circumstances with a tax advisor before filing.
Section 168(k) Bonus Depreciation
With the passage of the One Big Beautiful Bill Act, Section 168(k) bonus depreciation shifted considerably. Where owners were previously limited to 40% of the costs remaining after a Section 179 deduction, they may now claim up to 100% bonus depreciation on qualifying property. Paired together, the two provisions give Roslyn businesses considerable flexibility in how they time their investment in a new Sprinter or eSprinter.
What is Section 179 Deduction for Vehicles?
The Section 179 of the IRS tax code allows businesses to deduct the full purchase costs of any qualifying vehicles that are bought or financed during the tax year. In other words, if you buy or lease a car for your business, you may qualify to subtract the expense from your income.
Section 179 Deduction
Buy or lease a qualifying Mercedes-Benz and receive a tax-deduction up to $25,000. Section 179 of the tax code rewards small- and medium-sized companies for investing in themselves by offering a tax break on certain purchases and leases, including eligible new and used Mercedes-Benz vehicles.
What Does the 179 Tax Savings Do for Me?
It gives you a chance to deduct up to $25,000 of a qualifying vehicle from your business’s gross income during that tax year—all at once.
In some cases you may even be able to deduct the full purchase price of your vehicle. (Please consult your tax professional to find out if you qualify for the full amount). It’s especially helpful for small businesses who want their tax savings right away, rather than receiving them bit by bit over time through depreciation.
It gives many businesses the financial leeway to purchase vehicles they need right away, rather than waiting.
Does My Business Qualify to Get This Deduction?
You may qualify if you:
- Are a business that purchased or financed new or used business equipment—including business-use vehicles—during the 2026 tax year
- Put this equipment into service between January 1, 2026 and December 31, 2026
- Used this equipment for business purposes more than 50% of the time
- Spent less than $3,500,000 on this equipment
What Are the Dollar Amount Limits on Claiming These Tax Savings?
These are the limits:
- You cannot write off more than $1,000,000
- The total amount of the equipment purchased cannot be more than $2,500,000. It phases out dollar-for-dollar after that, so once $3,500,000 is spent, the deduction goes away entirely.