Important Tax Write-Offs for Your Work Truck
While you are looking at work trucks for sale in Greensboro, NC, you should also be thinking about what tax write-offs your business might be eligible for once you make the purchase. It will cost your company a significant amount of money every year to operate and maintain work vehicles. In most instances, expenses such as these can be used to reduce your annual taxable income and in doing so reduce your total tax liability.
Standard Deductions for Work Trucks
In most cases, the expenses incurred buying and maintaining work trucks are no different from any of the other tax-deductible expenses your company incurs each year. Not only are your ongoing expenses tax deductible, but should you decide to buy a new work truck to add to your fleet, the IRS has rules in place that allow you to take a large deduction the year you buy it.
Section 179 Deduction and Your Work Truck
Under Section 179 of the IRS Tax Code, small businesses are allowed to take a 100% tax deduction of the purchase price of new business equipment. Under normal circumstances, the IRS requires you to depreciate the cost of new business equipment over a period of years. However, if you take advantage of Section 179, you can combine all the depreciation for your new work truck together for the year you buy the vehicle.
Deduction Limits for Your New Work Truck
Before you get too excited, you should be aware there are limits to how much your business can deduct for equipment purchases, including new work trucks. Under current IRS tax law, you can deduct up to $500,00 dollars used for the purchase of new equipment, including new trucks, as long as your new equipment costs do not exceed $2 million in a tax year. Once your expenses surpass this amount, the total amount you are allowed to deduct under Section 179 begins to drop. The idea behind Section 179 was that it was written to protect small businesses rather than larger ones that can more easily afford to meet their tax obligations.
Work Trucks Must Meet Certain Criteria
However, not all work trucks meet the strict requirements established under Section 179 of the IRS code. In order for your new work truck to qualify, it must be rated at more than 6,000 lbs. gross vehicle weight rating (GVWR). Typically, 1/2 and 3/4-ton pickups or vans do not qualify for this deduction. At the same time, the bed of the truck must be at least six feet long. Cargo vans must have the same amount of space behind the driver's seat if there is no other seating.
Of all the tax deductions available for any work truck for sale in Greensboro, NC, Section 179 may offer you the best possible return on your investment. It can be used on both new and used trucks as long as they meet the strict size requirements. Come see our sales team at Bill Black Chevrolet and let us help you get into the right work truck for your business, one that meets all of the criteria to help you make the most of your tax deductions.