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What is the Section 179 Deduction for Vehicles?
Allows business owners to:
How Section 179-Qualifying Vehicles Can Help You
How the Section 179 Tax Deduction for Vehicles Works
Vehicles that are used primarily for business reasons may qualify for the Section 179 deduction. If you have a qualifying business car, truck, SUV or van, you may be able to deduct the vehicle’s depreciation from your taxable income.
or lease a qualifying vehicle and put it to use for your business before December 31st
the cost of the vehicle, up to the current limits, from your business taxes in the year you put it into use
money on the purchase or lease of business vehicles through tax savings
FAQs: Section 179 Tax Deduction for Vehicles
The Section 179 tax deduction is already confusing. Added limits and restrictions for certain vehicles make it even harder to understand. We put together some of the common questions related to Section 179 and vehicle deductions.
Vehicles must be driven more than 50% of the time for qualified business use. The vehicle must also be titled in the name of the business. The commute to and from work doesn’t count as business use and is considered personal use.
Certain work vehicles that are unlikely to be used for personal reasons, are fully deductible under the Section 179 rules for vehicles. These include passenger vans with nine or more passenger seats behind the driver, such as hotel shuttles, as well as an enclosed cargo compartment with no seating behind the driver. For more vehicle types that qualify for the full deduction, check out the latest information from the IRS.
Yes, as long as a vehicle is new-to-you and not purchased from a family member, you should be able to claim all or part of the vehicle using the Section 179 deduction.
Resources for Section 179 Tax Deduction for Vehicles
Get the latest information on the changes to the Section 179 deduction and vehicle limits for the deduction. We’ve put together resources on how the deduction works and who can take it.
Get the information you need on how to read and understand the IRS form you must complete to get the deduction. This article walks you through each section to help you better understand how to take your deduction.
Learn the difference between the Section 179 deduction and bonus depreciation. Find out how each works and what to consider before taking your deductions.
Find out what you can deduct for the Section 179 deduction, including information regarding vehicles. This post also includes a list of non-qualifying equipment. You can also use this article to learn more about how to lease or finance business vehicles eligible for the Section 179 tax deduction.
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(1) 24 hours:
Fast approvals and 24 hour funding subject to receipt of required documentation, underwriting guidelines, and processing time by your bank. Funds are deposited into your business checking account as soon as the next business day after approval and acceptance of terms.
(2) Early payoff discounts:
National Funding offers special opportunities for its customers to terminate contracts early and receive a discount in the process. Equipment Finance customers who pay off the total remaining balance early, at any point during the contract, will automatically receive a 6% discount off the total remaining balance. Working Capital customers who pay off the total remaining balance in full within the first 100 days of the contract will automatically receive a 7% discount off the total remaining balance. We do not currently offer a discount on our lease contracts. Customers must pay off the balance in full, be current, and in good standing to take advantage of the discount within the time parameters.
(3) Automatic payments:
Loan payments are withdrawn via Automatic Clearing House (ACH) Monday through Friday excluding bank holidays.
(4) Wide variety of payment options:
- Equipment Financing: payments are remitted monthly with terms of 2-5 years
- Working Capital Loan: payments can be remitted daily or weekly with terms of 4 months up to 24 months
(5) Potential Tax Savings:
The Section 179 Tax Deduction allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. Meaning, if you buy (or lease) a piece of qualifying equipment, you can deduct 100% of the purchase price from your gross income. You can secure the equipment, tools, and technology you need, while also taking advantage of significant tax deductions - up to $1,000,000. Consult your tax professional for more details.
(6) Guaranteed lowest payment:
Pursuant to the terms and conditions specified in these Rules and Restrictions of the Guaranteed Lowest Payment, National Funding guarantees to provide the lowest payment on equipment leased through National Funding, for lease terms from 24 to 60 months, or to pay $1000 towards qualifying executed leases. Lease payment comparisons must be based on a lease in excess of $10,000, for approved equipment, and with the same terms and conditions as those offered by National Funding within seven days that the National Funding terms are issued. To be eligible, customers must provide a competitive lease quote without contingencies, and vendor invoice, and in the name of the lessee within seven calendar days of the date National Funding issues its terms. Guarantee only valid on competitive equipment leases. Equipment finance agreements do not qualify.
In the event that the monthly lease payment amount from the competing lease company or bank is lower than the monthly payment that is being offered by National Funding for the same equipment and pursuant to the same terms, National Funding will verify the validity and accuracy of the competing leasing company’s or bank’s payment options, terms and the vendor quote. National Funding has the option, in its sole discretion, to either beat the competing leasing company’s or bank’s monthly payment rate, or pay $1000 to the lessee. The lessee must provide National Funding with the competing company’s or bank’s signed lease agreement with payment terms/options, and take delivery of the equipment. Payments will be made within 30 days, and lessee is responsible for any taxes.
The Guaranteed Lowest Payment is available to both new and established customers of National Funding. This offer is valid for new lease applications only. The Guaranteed Lowest Payment is not retroactive — a previously funded equipment lease with National Funding is not eligible for the Guaranteed Lowest Payment. Only non-contingent offers of lease terms and payment are eligible. Offers made to lessee that include subsidization by manufacturers and/or vendors will not be considered in comparing competing offers.
The Guaranteed Lowest Payment may be discontinued at any time without notice.
To participate in the Guaranteed Lowest Payment program, if you have a lease agreement and vendor quote which you believe will qualify for the program, contact your National Funding Lease Manager.
(7) Terms and Conditions apply:
This is not a guaranteed offer of credit. Loans subject to lender approval. Approval amount is based on eligibility determined by information obtained from Dun & Bradstreet. Actual eligibility may vary. Restrictions may apply. Application is subject to approval by the lender and is based on factors such as business type, time in business, annual sales, average bank balances, personal credit and other variables deemed relevant by the lender.