Purchasing a vehicle for your business can be a considerable expense, especially if you’re planning on purchasing a large SUV. That’s part of the reason why the IRS offers you the opportunity to deduct the cost of a vehicle purchase from your taxable income if the vehicle weighs over 6,000 pounds. To help you figure out if you’re entitled to claim this tax saving, we’ve put together an explanation of the automotive tax deduction and the INFINITI QX80 qualifies!
The 6,000-pound vehicle tax deduction is a rule under the federal tax code that allows people to deduct up to $25,000 of a vehicle’s purchasing price on their tax return. The vehicle purchased must weigh over 6,000 pounds, according to the gross vehicle weight rating (GVWR), but no more than 14,000 pounds. The truck or SUV must be used for business purposes in order to qualify.
The idea behind the tax credit is that it will encourage business owners to invest in new vehicles to support their company’s growth.
Details on the tax deduction are included in Section 179 of the federal tax code. The terms state that the vehicle has to be put into service by December 31 of the tax year in order to qualify for the deduction. To prove this, you may need to keep a record of the trips you take with the vehicle, including the purpose of the trip, so you can prove that it was work-related.
Section 179 stipulates several conditions that you must meet in order to claim the deduction. Firstly, the SUV or truck weighing over 6,000 pounds must be purchased using a loan agreement recognized by the IRS or leased. A further requirement is that your business name must appear on the vehicle title. This means that if your personal name appears on the title, you won’t be able to qualify for the deduction.
Even if you don't use the vehicle for business purposes all the time, you may still be able to claim part of the deduction. Typically, the maximum deduction you can claim will vary according to the percentage of time you use the SUV or truck for work-related reasons. We are not tax professionals. See your accountant for your specific details.
If you have questions about any of the vehicles we have to offer, or you’d like to get the purchasing process started on a New INFINITI QX80, don’t hesitate to contact us today.