For heavy vehicles, those with a gross vehicle weight rating (GVWR) above 6,000 pounds, the total cost of the car can be deducted in the year it is placed in service, up to the specified limits. GVWR is the maximum allowable weight of a vehicle, including passengers and cargo.
Vehicle Application: This is where the term "SUV tax loophole" originates. Vehicles weighing between 6,000 and 14,000 pounds qualify for a deduction of up to $27,000 under Section 179. For healthcare practices, Section 179 can provide substantial tax savings when investing in new equipment or upgrading existing assets.
General deductions for business use of vehicles
For new and pre-owned (used) vehicles, the maximum write-off for the first year is $10,200, plus an additional $8,000 in bonus depreciation. For SUVs with weights over 6,000 lbs., but no heavier than 14,000 lbs., the full 100% of cost can be depreciated.
What SUV has a towing capacity of 6000 pounds? The Dodge Durango and Jeep Grand Cherokee with V8 engines can tow around or above 6,000 lbs, making them popular choices in the best SUVs for towing.
This significant tax incentive is designed to encourage businesses to invest in themselves by purchasing the equipment they need to grow. Section 179 can be extremely profitable for your business, allowing you to invest in equipment, vehicles, and software while retaining more of your tax dollars.
Can my LLC claim the depreciation on a car? Yes. However, the business must use the car at least 50% of the time for business reasons. Generally, there are two methods you can choose from—General Depreciation System or Straight Line.
Limited circumstances for stand-alone 179 benefits.
The Section 179 expense limit and phase-out threshold (inflation-adjusted to $1,250,000 and $3,130,000, respectively, for 2025) are now permanent parts of the tax code.
Tax write off for a vehicle over 6,000 lbs.
If your vehicle still weighs less than 14,000 pounds, you could receive a maximum first-year deduction of up to $27,000 for 2022 taxes, and up to $28,900 for 2023 taxes.
Tax credits up to $7,500 are available for eligible new electric vehicles and up to $4,000 for eligible used electric vehicles. You can claim the credit yourself or work with your dealership. Tax credits are available for home chargers and associated energy storage, each up to $1,000.
The Toyota Tundra has a curb weight of up to 6,185 pounds, making it perfect if you want to purchase a tax-deductible vehicle for your business. Like other vehicles on this list, the Toyota Tundra is essential for heavy lifting and transporting large equipment.
As of 2024, the deduction for vehicles weighing between 6,000 and 14,000 lbs has been adjusted. Taxpayers can now deduct up to $30,000 for qualifying vehicles falling within this weight range. However, larger commercial cars, vans, and buses continue to be exempt from this SUV rule.
Small Business Customers May Claim Up to 100% of the Purchase Price of a vehicle. Under new depreciation laws, your business might be able to deduct up to 100% of the purchase on an unlimited number of qualifying vehicles that you will be using for business purposes!
Several vehicles meet the criteria for this tax benefit, particularly those with a Gross Vehicle Weight Rating (GVWR) of over 6,000 lbs. Popular models like the Range Rover, Range Rover Sport, Defender 90, Defender 110, Defender 130, and Discovery are examples of vehicles that qualify.
Pros of buying a car for your business
Deducting car expenses from your taxes can save your business money in the long run, and with a separate commercial car insurance policy, any accidents that occur while you're driving for business reasons will be handled through that individual policy.
Your LLC can pay for your cell phone if you use it for business purposes. This expense is considered a legitimate business expense and can be deducted from the LLC's income before calculating taxes. You should keep records of your business-related calls, emails, and other activities to justify the deduction.
Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.
To qualify for the Section 179 deduction, your property must have been acquired for use in your trade or business. Property acquired only for the production of income, such as investment property or rental property (if renting property is not your trade or business), and property that produces royalties do not qualify.
When to Claim the Section 179 Deduction. The section 179 deduction is only available in the tax year the vehicle is purchased and placed in service for business use, and the vehicle must be used over 50% of the time for business purposes.
All vehicles weighing over 14,000 pounds automatically qualify for a 100% purchase price deduction. Additionally, any vehicles modified for a specific use (ambulance, police car, EMS, construction equipment, etc.) also qualify for a 100% deduction regardless of the weight.
Engine size and torque play a huge role in determining how well your SUV can handle towing. A V6 engine might suffice for lightweight travel trailers, but if you're pulling heavier loads, a V8 or even a turbocharged engine might be necessary.
Jeep Grand Cherokee Towing Capacity at a Glance
The plug-in hybrid variant of the Jeep Grand Cherokee, which is known as the Jeep Grand Cherokee 4xe, can tow up to 6,000 pounds.