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Tax Deductions for Heavy Vehicles

Stephen Fishman
Tax expert and contributor MileIQ

Updated February 28, 2019

Due to recent changes in the tax law, many business people who purchase heavy SUVs and similar vehicles for their business can now take enormous depreciation deductions. In many cases, they are able to deduct the full cost of an expensive heavy vehicle in a single year. This development is something that has never been possible before.

Limited depreciation deductions for passenger vehicles

There are annual limits on how much you can deduct through depreciation if your car is a passenger automobile. A passenger automobile is:

  • Any four-wheeled vehicle
  • Made primarily for use on public streets and highways, and
  • Has an unloaded gross weight of 6,000 pounds or less

In the case of vans and trucks, the limit of 6,000 pounds is based on gross loaded vehicle weight.

If your car is a passenger automobile, you can depreciate no more than $10,000 of the cost the first year. This is so no matter how much you paid for the car. You can also deduct another $8,000 the first year through bonus depreciation (see below). You may deduct up to $16,000 the 2nd year, $9,600 the third year, and $5,760 every year after that.

No limits on depreciation for heavy vehicles

The annual limits on vehicle depreciation don't apply to trucks, vans, and SUVs built on a truck chassis that are weight-rated by the manufacturer at more then 6,000 pounds gross loaded vehicle weight. This means that owners of such vehicles can take full advantage of two great tax deductions:

  • Bonus depreciation, and
  • Section 179

100% bonus depreciation for heavy vehicles

A massive new tax law called the Tax Cuts and Jobs Act (TCJA), went into effect in 2018. Among other things, it greatly expanded bonus depreciation. During 2018 through 2022, you may deduct in a single year up to 100% of the cost of most types of personal property you use for business with bonus depreciation.  However, bonus depreciation for passenger vehicles is limited to $8,000.

Because the passenger automobile depreciation limits don't apply to heavy vehicles, you can take full advantage of bonus depreciation when you purchase one. You can deduct 100% of the cost in one year if you use the vehicle 100% for business.

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Heavy vehicle bonus depreciation: Examples

Scenario 1: Arthur purchases in 2018 a $100,000 truck he uses 100% of the time for his hauling business. He may deduct the entire $100,000 cost in 2018 using 100% bonus depreciation.

If you use the vehicle less than 100% for business, you must reduce your deduction accordingly. However, you must use the vehicle at least 51% of time for business to use bonus depreciation at all.

Scenario 2: Bill purchases a 6,500 pound SUV for $50,000 in 2018. He uses the vehicle 60% of the time for his nursery business, thus his depreciable basis is $30,000 (60% x $50,000 = $30,000. He may deduct his entire $30,000 cost in 2018 with 100% bonus depreciation.

Section 179 deduction

Another method of deducting the cost of a heavy vehicle is using Section 179. Section 179 allows business owners to deduct $1 million in personal property they buy for their business each year. However, the Section 179 deduction is limited to $25,000 for trucks and SUVs. For these purposes, an SUV is any four-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways that has a gross vehicle weight of 6,000 to 14,000 pounds. But with bonus depreciation set at 100% during 2018 through 2022, there would appear to be little reason to use Section 179.

How to qualify for the bonus depreciation deduction

To qualify for bonus depreciation (or Section 179), you must use your vehicles for business more than 50 percent of the time. This is true for the full five-year depreciation period that applies to vehicles.

If your use dips below 50 percent during any of that five-year period, you'll have to repay your bonus depreciation deduction. That's why it's vital to track your business mileage, no matter what method you're using to take a deduction.

List of heavy vehicles

You'll find a list of heavy vehicles below. These are vehicles with a loaded weight of over 6,000 pounds.

The table below is not an exhaustive list. You can consult a car manufacturer's website to see how much a vehicle weighs.

          Make      Model      Loaded Weight       Audi  Audit Q7 3.0T Premium  6479        BMW  X5  6063        Buick  Enclave  6411        Cadillac  Escalade  7100       Cadillac  Escalade ESV  7300        Chevrolet  Express 2500  8600        Chevrolet  Express 3500  9600        Chevrolet  Silverado 1500  6900         Chevrolet  Silverado 2500HD  9500        Chevrolet  Silverado 3500HD  13025        Chevrolet  Suburban  7300        Chevrolet  Tahoe  7100       Chevrolet  Traverse  6411        Dodge  Grand Caravan  6050        Ford  Expedition  7260        Ford  Expedition EL  7500         Ford  Explorer  6160        Ford  F-150  6010        Ford  F-250  9950        Ford  F-350  10000        Ford  F-450  14000        GMC  Savana 2500  8600       GMC  Sierra 1500  6900       GMC  Sierra 2500HD  9500       GMC  Sierra 3500HD  13400       GMC  Acadia  6100       GMC  Yukon  7100       GMC  Yukon XL  7300       Honda  Odyssey  6019       Infiniti  QX80  7300       Jeep  Grand Cherokee  6500        Land Rover  Range Rover  7033        Lexus  LX570  7385        Lincoln  Navigator  7500        Lincoln  Navigator L  7700        Mercedes  G-Class  7058        Mercedes  GL-Class  7165        Mercedes  Sprinter  11030        Nissan  Armada  7300        Nissan  NV Passenger  9520        Nissan  Titan  7300        Porsche  Cayenne  6195        Ram  ProMaster 1500 Cargo  8550        Ram  ProMaster 2500  8900        Ram  ProMaster 3500  9350        Ram  Ram 1500  8550        Ram  Ram 2500  9000        Ram  Ram 3500  10100        Toyota  4Runner  6100        Toyota  Land Cruiser  7385        Toyota  Sequoia  7100

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