Maximize Your Truck Investment with the Section 179 Deduction

Maximize Your Truck Investment with the Section 179 Deduction

If your business depends on trucks, trailers, or specialized equipment, the Section 179 tax deduction (“Section 179”) offers a unique chance to lower your tax burden while investing in essential assets. Here’s everything you need to know about how Section 179 works, the benefits, and why this tax deduction is an excellent opportunity for trucking businesses.

What Is Section 179?

Section 179 is a tax code provision that allows businesses to deduct the cost of qualifying equipment, including trucks, trailers, and other heavy vehicles, purchased or financed within the tax year. Unlike traditional depreciation, which spreads deductions over an asset’s life, Section 179 provides the option to take a full deduction upfront. This immediate expensing is particularly advantageous for businesses with high initial equipment costs, helping to manage cash flow and ease the cost of investments.

2024 Deduction Limits and Spending Cap

For the 2024 tax year, Section 179 allows businesses to deduct up to $1,220,000 in equipment expenses. This limit applies to new and used equipment purchased and put into service during the tax year as long as it’s primarily used for business (more than 50% of the time). However, if total equipment purchases exceed $3,050,000, the deduction starts to phase out.

Who Qualifies for Section 179?

To qualify for Section 179, businesses must meet a few critical criteria:

1.       Purchase and Use Eligible Equipment includes trucks, trailers, vocational vehicles, and other business-use equipment. The IRS classifies the vehicles into three categories: light, heavy, and other, based on their Gross Vehicle Weight Rating (“GVWR”) and business usage. Vehicles with a GVWR over 14,000 lbs. or vehicles used for work-centric, nonpersonal use can be fully deductible with no extra limitations. The IRS classifies the vehicles into three categories: light, heavy, and other, based on their Gross Vehicle Weight Rating (“GVWR”) and business usage. Vehicles with a GVWR over 14,000 lbs. or vehicles used for work-centric, nonpersonal use can be fully deductible with no extra limitations.

2.       Put Equipment into Service Within the Tax Year – Equipment must be used for business before December 31, 2024, to qualify for a deduction on this year’s taxes.

3.       Use the Equipment Primarily for Business — The equipment must be used for business purposes; the deduction is prorated based on the percentage used for business purposes. If it is not used 100% of the time for business, the deduction is prorated based on the percentage used for business purposes.

How to Take Advantage of Section 179

When tax time arrives, businesses can claim the Section 179 deduction by filing IRS Form 4562. Working with a tax professional can help you ensure accuracy, maximize deductions, and comply with all IRS requirements. For a quick estimate of your potential savings, try using the Section 179 Deduction Calculator to see how your equipment purchases could impact your taxable income.

Why Section 179 Matters for Your Trucking Business

For businesses in trucking, construction, logistics, and other capital-intensive sectors, the ability to write off equipment costs immediately means more flexibility to acquire necessary vehicles and machinery. Lowering taxable income gives you greater cash flow to put back into operations or expand your fleet while meeting your tax obligations. 

Disclaimer: Forge Truck Centers ™ is not a tax advisor. This information is for general guidance only. Please consult your tax professional to see how Section 179 may apply to your business.