For business owners, finding ways to reduce taxable income is always welcome news. One strategy that continues to deliver savings is the Section 179 deduction. If you’ve purchased business equipment or vehicles, this tax deduction could potentially save you thousands in 2025.

Disclaimer: This article is for informational purposes only and is not tax advice. Please consult a qualified tax professional regarding your specific situation before making any decisions related to Section 179 or other tax deductions.

What Is the Section 179 Deduction?

Section 179 allows businesses to deduct the full cost of qualifying property in the year it’s purchased and put into service, rather than depreciating it over several years. This applies to tangible assets like machinery, office equipment, technology, and even certain vehicles.

2025 Section 179 Limits at a Glance

For the official IRS rules and limits, visit the IRS Section 179 page.

• Maximum Deduction: $2,500,000 (phases out above $4,000,000)
• Bonus Depreciation: 100% (for equipment placed in service after January 19, 2025)*
• Equipment: New or used equipment qualifies for the full deduction
• SUVs & Trucks (>6,000 lbs GVWR): $31,300 max first-year Section 179; remainder depreciated
• Business Use Requirement: Must be used more than 50% for business; deduction limited proportionally

Note: Section 179 phases out dollar-for-dollar for qualifying purchases above $4,000,000 and is fully phased out at $6,500,000.

Which Vehicles Qualify?

Vehicles are one of the trickiest areas of Section 179, so it helps to know the categories:

• Light Vehicles: Passenger cars, crossovers, and small utility trucks under 6,000 lbs GVWR. Deduction limits depend on bonus depreciation eligibility.
• Heavy Vehicles: Full-size SUVs, large pickups, and commercial vans (6,000–14,000 lbs GVWR) are eligible for a $31,300 Section 179 deduction in 2025, with the rest depreciated.
• Specialized Vehicles: Vehicles over 14,000 lbs GVWR or modified for commercial use (like delivery vans, ambulances, or shuttle buses) can be fully deducted without limit.

The deduction is proportional if the vehicle is not used 100% for business.

At Clear Skies Capital, we help business owners explore opportunities like Section 179 deductions to maximize cash flow. Call us at 800-230-9822 to speak with our team about how you can benefit this year.

*Property placed in service before January 20, 2025, may be limited to 40% bonus depreciation (60% for certain long production period property and aircraft). Consult your tax advisor for timing details.