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.
-
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.
-
Qualifying vehicles may be purchased new or pre-owned. Leased vehicles, and vehicles you intend to lease to others, do not qualify.
-
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.
