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Recently expanded tax code provisions have made Section 179 bigger and better than ever – now allowing over $1 million in deductions for qualifying vehicle purchases. If you use a Chrysler, Dodge, Jeep, or Ram vehicle for business purposes there are huge tax advantages within reach. With the Ram Commercial Fleet being a popular choice for business vehicles, this may be the year to leverage all available incentives when buying or leasing your next work truck.
Taking Advantage of the Section 179 Deduction
The Section 179 Deduction allows businesses to fully deduct the purchase price of qualifying vehicles in the year they are put into service, rather than depreciating the cost over several years. This applies to new or used vehicles up to a certain dollar limit. For 2023, up to $1,080,000 in equipment and vehicle purchases can be fully expensed in one year.
To be eligible, the vehicles must be used more than 50% for business purposes. This includes trucks, vans, SUVs and other large vehicles that meet requirements around gross vehicle weight. There are also exceptions allowing certain vehicles under 6,000 lbs as well.
With tax savings reaching into six figures for some businesses, combined with cash flow benefits, Section 179 represents one of the most lucrative tax breaks on the books. The key is knowing how to properly document eligibility and claim the deduction when filing your taxes.
Which Vehicles Qualify for the 179 Deduction?
There are over 150 vehicles that qualify for the Section 179 deduction under current guidelines. This comprehensive list of qualifying models (qualifying Ram models here) includes, but not limited to, all your favorite CDJR trucks, vans, and large SUVs that exceed 6,000 GWVR (Gross Vehicle Weight Rating):
- Chrysler: Pacifica
- Dodge: Durango, Grand Caravan
- Jeep: Grand Cherokee, Wrangler Unlimited, Gladiator Rubicon
- Ram: 1500 Classic, 1500/2500/3500, 3500/4500/5500 Chassis Cab, ProMaster
The Ram truck lineup – including the 1500, 2500, 3500, 4500, and 5500 models – all meet IRS criteria for substantial Section 179 deductions. Commercial owners stand to benefit hugely this year from acquiring a new or used Ram pickup. Beyond trucks, both the outgoing Dodge Grand Caravan and the modern Chrysler Pacifica minivan qualify as well.
On the SUV side, Jeep Wranglers and Grand Cherokees used for small business purposes will generate deductions up to $25,000. Bigger passenger vehicles like the Dodge Durango also qualify. And vehicles like the Ram ProMaster Cargo Van offer full Section 179 expensing.
The full specs on gross vehicle weight ratings and other requirements can be found in the IRS guidelines. But you’ll be in good shape with most Chrysler, Dodge, Jeep, Ram vehicles purchased or leased for business use.
As always, consult your tax professional to confirm the application of the deduction to your specific vehicle acquisition.
Planning Your Purchase Around Section 179 Tax Savings
The great news for local Chrysler, Dodge, Jeep, Ram buyers is that any vehicles acquired in 2023 are eligible for the Section 179 deduction on 2023 tax returns filed in early 2024. So if you’ve been holding off on purchasing that much-needed work truck – there’s no reason to wait any longer!
Just keep in mind:
- Fully electric vehicles have lower deduction limits
- Deductions can only be made on vehicles placed “in service” meaning actively used for business in that year
- The tax rules can change year to year
It is a common mistake for business owners to kick the can down the road when adding necessary trucks or fleet vehicles, often waiting until the next calendar year to save on taxes. This “early in the year” first quarter rush can strain inventory at dealerships.
The savvy move is planning ahead, which is why we encourage customers to connect with our finance experts now if you anticipate needing a new Ram truck or commercial vehicle for your 2023 taxes. We can walk through all the options – from attractive lease programs to financing that matches your cash flow needs and future deduction plans.
The bottom line – you stand to gain from significant tax deductions AND yearlong productivity with your new fleet if you take action now. Most people wait until early next year, when it’s already too late to qualify for tax write-offs the previous year. We can even file the paperwork necessary to deliver any new vehicle purchases in 2023 for end-of-year tax documentation.
Learn More About the Section 179 Tax Advantage
Whether running a farm, managing commercial real estate, or expanding a small business – investing in a dedicated CDJR work vehicle provides many advantages. Tax deductions through the Section 179 provision can magnify the value of your pickup truck, cargo or passenger van, or rugged SUV.
To fully understand eligibility for the vehicle expense deduction, speak with our finance team about new or used options that align with your budget. We’ll break down exactly how you can take advantage of the 2023 tax year limits. Bud Clary Auburn Chrysler Dodge Jeep Ram is conveniently located in Auburn, WA to serve customers throughout the region like Seattle, WA, Tacoma, WA, and Kent, WA. Reach out today!
NOTE: The information supplied here is provided by your local Chrysler, Dodge, Jeep, Ram Dealer as a public service to its customers. It should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability. Individual tax situations may vary. Federal rules and tax guidelines are subject to change. For more information about the Section 179 expense write-off or other business vehicle expense write-offs, you should consult your tax advisor for complete rules applicable to your transaction and visit the Internal Revenue Website at www.irs.gov.
- This analysis applies only to vehicles placed in service in the United States after December 31, 2015, and by December 31, 2023, with no written binding contract for acquisition in effect before January 1, 2023. The aggregate deduction of $500,000 under Internal Revenue Code Section 179 is most beneficial to small businesses that place in service less than $2,000,000 of “Section 179 property” during the year (vehicles and other business property).
- IRC Section 280F(d)(7(B) requires that the limitation under IRC Section 280F(a)(1) be adjusted annually, based on the CPI automobile component for October of the preceding year. The IRS officially announced the Section 280F depreciation limits in Revenue Procedure 2017-23. The passenger automobile imitation is $11,160, the trucks/vans under 6,000 lbs. limitation is $11,560. SUV’s over 6,000 pounds GVWR are limited to a deduction of $25,000 under Section 179(b)(5) with the remaining basis in the vehicle depreciated under normal MACRS methods. The expensing restrictions under Section 280F do not apply to vehicles that are considered to be “qualified non-personal use vehicles” (QNUVs). A QNUV is a vehicle that, by its nature or design, is not likely to be used more than a de minimis amount for personal purposes. For more information, see Income Tax Reg., Sec. 1.280F-6(c)(3)(iii), Income Tax Reg. Sec. 1.274-5T(k), and Revenue Ruling 86-97, and contact your tax advisor for details. Consult your tax advisor as to the proper tax treatment of all business-vehicle purchases.
- All prices exclude taxes, title, and registration and document fees. Not all buyers will qualify for all offers. Above total savings are examples of specific vehicles; total savings varies by vehicle. (Individual Vehicle Incentives and Offers go here) Available at participating dealers only. For all offers, take new retail delivery from dealer stock by 12/31/2024. See dealer qualifications and complete details. All incentives were correct at the time of printing and are subject to change at any time. Models shown may not represent actual vehicle description listed, and therefore may include additional features and/or accessories.
