Business owners have the opportunity to make their next new vehicle purchase even more rewarding thanks to the potential benefits made possible by Section 179 of the IRS tax code. In fact, choosing a new Ford Pick-Up or SUV instead of another luxury vehicle can be a smart decision that may provide a tax advantage for your business, but there have been important changes for the 2025 Tax Year, which we'll go into detail below.

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IRS Section 179 for 2025

Section 179 of the IRS tax code allows businesses to deduct the price of qualifying equipment, such as vehicles, purchased or financed during the tax year.  The Internal Revenue Service breaks down the list of vehicles that qualify for Section 179 deduction into three primary groups: Light, Heavy, and Other.

For the topic of this page, we're only really looking at the "Heavy" category of vehicles, which are defined as vehicles with a GVWR (gross vehicle weight rating) over 6,000 pounds, but not more than 14,000 pounds. For 2025, Section 179 allows for a maximum depreciation of $31,300 in the current tax year for these "Heavy" vehicles, provided the vehicle is bought and put into service before January 1, 2026 and also meets certain other conditions:

• The vehicle can be either new or used; however, it must be purchased in an “arm’s-length” transaction that has been financed with qualified loans and leases and the title of the vehicle must be in the company’s name and not in the name of the company owner.
• At least 50% of the time, the vehicle should be used for business purposes and if the vehicle is not used completely for business purposes, 100% of the time, then there is a reduction of depreciation limits by the corresponding percentage of personal usage.
• You can claim the Section 179 deduction only in the tax year in which the vehicle has been put into service i.e. when the vehicle is ready and available, although you are not using the vehicle.
• Also, a vehicle that has been used for personal purposes first does not qualify for the Section 179 deduction if its purpose is changed to business use in a later year.
• Note: Individual tax situations may vary. Please consult your tax advisor for complete details on rules applicable to your business.

IRS Section 168(k) "Bonus Depreciation"

Additionally, Section 168(k) allows for additional "Bonus Depreciation" amounting to 100% of the purchase price of the vehicle through the end of 2025, which when added to the $31,300 from Section 179, can effectively allow you to fully-depreciate your qualifying vehicle purchase in the 2025 tax year, instead of depreciating the purchase over 5 or more years.  This can deliver a significant tax savings to your business while also upgrading your fleet of work vehicles.