ARE YOU A BUSINESS OWNER?
Did you know that you can receive a significant tax deduction on select Porsche models?
Tax Code 179 allows business owners who purchase a vehicle over 6,000 pounds GVWR (gross vehicle weight rating) to write off a percentage of the depreciation of the vehicle during the year in which it is purchased or leased. As the new year approaches, this is the optimal time to register a new vehicle under your business’s name and to ensure you’re maximizing your business’s tax deductions. Contact a tax advisor to learn how much you can expect to write off based on your business and vehicle of choice.
What is tax code 179?
Tax Code 179, the special deduction to write off equipment in the year purchased, was extended permanently in 2015 legislation. This has been further liberalized by the Tax Cuts and Jobs Act (TCJA) that Congress enacted in December 2017.
Beginning in 2018, this special deduction allows businesses to write off up to $1 million worth of depreciable assets in the year that they are purchased. This can include new and used machinery, heavy equipment, furniture and fixtures, and certain vehicles, mainly SUVs and pickup trucks.
There are certain limitations to the rule in addition to the $1 million cap. For example, if you purchase more than $2,500,000 in assets for the year, then you will have this deduction phased out. Also, you must have a positive income and not a net loss for the year. However, if you meet these guidelines, then it can be a great idea to move those vehicle purchases you are planning for next year forward to 2020 to take advantage of last-minute tax savings. You must purchase the vehicle by December 31, 2020, to get the write-off on your 2020 taxes.
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