If you buy a heavy vehicle, defined as greater than 6,000 GVW, you just got a big deduction in 2018. First, determine how much business use you have. If you have 90% business use, then you will be able to take 90% of the available deduction. If you have 70% business use, you get 70% of the available deductions. But if you have 100%, then you get it all.
The Section 179 deduction is still $25,000 maximum. That, in and of itself, is a good deal, but the really good deal is the bonus depreciation. That’s now 100%.
You can use it on a luxury vehicle for a deduction of $16,000. But if you do take the bonus depreciation on a luxury vehicle (defined basically as any vehicle that’s not clearly a work truck or van or a heavy vehicle), you can’t take any other depreciation on that item for the next 5 years. It usually doesn’t work out to take the new 100% bonus depreciation.
The big difference is only with heavy vehicles. They now are eligible for the full 100% bonus depreciation. You can use it in conjunction with the Section 179 or just by itself.
You need to buy the vehicle to qualify. You can’t just lease it. It is possible to finance it with little or no down and still get the write-off.
If you’re looking for a last minute write off in 2018, consider a heavy vehicle. With the new hybrids and flex fuel options, it doesn’t mean you’re going to have to pay a lot in fuel to maintain it.