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Need 2024 Tax Deductions? Buying a Business Vehicle Could Be Your Answer

By: Ernie Neve

As the end of 2024 approaches, now is the perfect time to consider two important questions:

  1. Do you need more tax deductions for 2024?

  2. Do you need a replacement business vehicle?

If your answer to either (or both) is yes, there’s a tax-smart move you can make—purchase and place a qualifying business vehicle into service by December 31, 2024. This simple step can unlock significant deductions while solving your transportation needs. Here’s how you can make the most of these opportunities.

First Rule: Placed in Service

To qualify for these deductions, your vehicle must be “placed in service” by December 31, 2024. This means owning and driving the vehicle at least one business mile before year-end. Don’t procrastinate—act now to ensure compliance with this rule.

1. Buying an SUV, Crossover, or Van

If you purchase and place into service a new or used SUV, crossover vehicle, or van with a gross vehicle weight rating (GVWR) of 6,001 pounds or more, you can unlock the following benefits:

  • Bonus Depreciation: Deduct 60% of the vehicle's cost.

  • Section 179 Expensing: Deduct up to $30,500 immediately.

  • MACRS Depreciation: Use the five-year depreciation schedule for the remaining value.

  • No Luxury Limits: Avoid depreciation caps typically applied to smaller vehicles.

Example: You buy a $100,000 heavy SUV used 90% for business:

  • Section 179 Expensing: $30,500

  • Bonus Depreciation: $35,700

  • MACRS Depreciation: $4,760 (or $1,190 if mid-quarter rules apply).

Your total 2024 write-off could be as high as $70,960!

2. Buying a Pickup Truck

A qualifying pickup truck placed into service by December 31, 2024, can offer even greater benefits:

  • Bonus Depreciation: Deduct up to 60%.

  • Section 179 Expensing: Deduct up to $1,220,000.

  • MACRS Depreciation: Use the five-year depreciation schedule.

  • No Luxury Limits: Fully deduct the business use portion.

To qualify for full Section 179 expensing, the pickup must:

  1. Have a GVWR of more than 6,000 pounds, and

  2. Feature a cargo bed at least six feet long that’s not easily accessible from the passenger compartment.

Example: You buy a $55,000 pickup truck used 91% for business. Your write-off could be $50,050 ($55,000 x 91%).

Short Bed Trucks: If the pickup doesn’t meet the six-foot bed length requirement, it’s classified as an SUV. While the rules change slightly, you’ll still qualify for up to $30,500 in Section 179 expensing and 60% bonus depreciation.

3. Buying an Electric Vehicle

Electric and plug-in hybrid vehicles also come with tax perks. If you buy a qualifying vehicle, you could be eligible for a federal tax credit of up to $7,500.

This credit comes before applying the depreciation or expensing rules based on the vehicle type and use.

Act Now to Maximize Your Tax Savings

Whether it’s a heavy SUV, a business-ready pickup, or an eco-friendly electric vehicle, purchasing and placing a vehicle into service before December 31, 2024, can help you:

  • Significantly lower your taxable income,

  • Avoid luxury depreciation caps, and

  • Keep your business running smoothly with a new vehicle.

Need help navigating these tax benefits or choosing the right vehicle for your business? Contact us today to make the most of your 2024 tax planning!

The clock is ticking—don’t wait until the last minute to make your move!