All You Need to Know about Buying or Leasing a New Business Vehicle as a Tax Deduction

Starting your own business can be an incredibly rewarding endeavor, but it's also a very costly process in the early stages. Maybe you, like many business owners in the Mechanicsburg, PA think that getting a vehicle specifically for your business could be very helpful and help your operations to be more effective and efficient, but perhaps you have reservations about whether or not you can really afford one at this juncture in time.

What you may not know, however, is that when you purchase a commercial vehicle like the Mercedes-Benz Sprinter Van for the use of your business, you write it off as a tax deduction.

Interested in learning more?

Take a look at our brief outline of how the tax deduction process works, which vehicles quality, what the restrictions are, and more. Then, when you're ready, visit us here at Sun MotorCars, Inc. to peruse your options.

Q: What is the Section 179 Deduction?

A: Section 179 of the IRS tax code allows businesses to deduct the purchase price of qualifying equipment purchased or financed during the tax year. That means, if you buy or lease a qualifying piece of equipment, such as a Sprinter Van--you can deduct the full purchase price from your gross income. The result is tax relief for small businesses in Mechanicsburg, and all across the country.

Q: What vehicles qualify?

A: Automobiles such as heavy "non-SUV" vehicles with a cargo area of at least six feet in interior length, vehicles that can seat at least nine or more passengers behind the driver's seat, or most classic cargo vans. Many small businesses choose the Mercedes-Benz Sprinter Van to fulfill their daily needs.

Keep in mind that the vehicle must be "new to you"--so you can buy or lease a new Sprinter, or purchase a used one.

Q: What are some of the restrictions?

A: There are several restictions such as the following:

• As previously mentioned, the vehicle must be "new to you."
• In order to qualify, the vehicle must be used for business at least 50% of the time.
• You may only make a claim in the tax year that the vehicle is "placed in service"--meaning, when it is ready to use, regardless of whether or not you are actually using it.
• There are caps to the total amount written off of $500,000 and aa $2,000,000 limit to the total amount of the equipment purchased.