I almost posted this in @wantcar 's thread but realized I may succeed in completely derailing it 
For those further interested in Section 179:
http://www.section179.org/
I couldn’t find a quick answer for this year, but when I used it in 2014 the rule for SUVs was:
25k Depreciation
Then
50% Depreciation (only applied to new vehicles)
Then
Standard Depreciation for that year
Following years:
Standard Depreciation
2017 will be my last year of depreciation.
@wantcar
Curious as to your input on this. To me, Section 179 seems more like a “kick the can down the road” approach to tax savings. Because now when I sell the car, I most likely will sell it for more than my cost basis and will have to pay taxes on those gains. In addition to that, I may even have to recapture some of the depreciation.
Is that your understanding as well? What’s the best strategy here to buy a new SUV every 2-4 years to max tax savings?
No, there are still major tax advantages using section 179 to expense your vehicles.
When you sell a vehicle you expensed under 179, it counts as ordinary income from sale of business asset. This means you don’t pay self-employment tax on it. When you deduct under 179, it reduced your income and thus self-employment tax. If you were to trade your old SUV for a new one, you don’t pay anything as long as you didn’t receive a profit. Plus you can of course deduct any additional payments for your trade.
Yes this does mean it’s more tax advantageous sell your old car and buy a new one. If you sold your old $10k car and then bought a $10k car in the same year. you’d save ~1300 in self-employment taxes.
Just beware that the IRS has tightened the rules on what vehicles qualify. Only SUVs over 6000lb can still expense under 179.
That’s true, But…
You must then reduce the basis of the new car by (trade in price less your old car depreciated basis). That has the effect of reducing the deductions on the new car.
So is that “kicking the can down the road” or “There’s no free lunch” ?
Death and Taxes !
1 Like
Sure, that’s why it’s usually more advantageous to sell rather than trade. With a sale you will incur income taxes on the sale of a business asset, but it’s not subject to recapture and you don’t pay self-employment taxes on it. And when you buy a new vehicle right after, you’d be able to expense it with section 179, nullifying the income tax from the sale.
Or you know, just turn yourself into an S-corp. The IRS seems to be OK with surgeons paying themselves $50k a year in salary and taking the rest as profit sharing. 
The SUVs over 6000 pounds thing is why leasing can be a better option if you don’t want to purchase one of the vehicles which qualify for expensing. Non-qualifying vehicles which are leased can be deducted 100% for business if used (or claimed as used…) as such.
My father is in the construction business, and need to get a new car after his lease is over next year. I came across this link for Section 179 rule changes for the 2018 tax year. Does this mean that almost the ENTIRE cost of the car can be written off???
I don’t know what to read from this…
You’d probably be better suited asking a tax attorney or an accountant than a bunch of strangers you dont know the background of on an Internet forum. You don’t want to screw with Uncle Sam.
1 Like
Just wanted to add this here… In case someone searches for this in the future:
