Section 179 Tax Deduction for Vehicles & Heavy Equipment in 2025

Consider heavy equipment purchases by December 31st and lower taxes this year.

The Section 179 vehicle deduction rules let many construction businesses expense the full cost of qualifying vehicles and heavy equipment right away in tax year 2025. That means you can purchase, place into service, and write it off this year, instead of spreading deductions over several years.

Here is what matters: the maximum Section 179 deduction is $2,500,000, the phase-out starts when total purchases pass the $4,000,000 phase-out threshold, heavy SUVs face a $31,300 cap, and 100% bonus depreciation may apply for eligible assets placed in service after January 19, 2025. You will get a clear, step-by-step process, common mistakes to avoid, and timing tips to act before December 31, 2025.

If a year-end buy is on your radar, plan now and talk with a tax professional.

The Section 179 vehicle deduction allows immediate expensing of the full purchase price of qualified equipment and vehicles used primarily for business, up to the annual limit. Instead of depreciating a machine over several years, you take a large deduction in the year you put it to work.

Key points for contractors:

• The asset must be purchased, delivered, and placed in service by December 31, 2025.
• New or used can qualify if it is new to your business.
• Ownership usually matters for Section 179. Some finance leases with a $1 buyout are often treated as a purchase.
• Immediate write-offs help cash flow and simplify year-end planning.

For current limits and examples, see the quick reference at Section179.org.

• The asset must be used more than 50% for business.
• Commuting and personal errands do not count toward that percentage.
• Keep simple logs: engine hours for machines, miles for trucks, job tickets, and delivery slips.
• Mixed use means you only deduct the applicable percent.

• New or used equipment can qualify if new to your business.
• Financing is allowed, and you can still take Section 179 in the year placed in service.
• According to IRS guidelines, interest on qualifying business vehicle loans may be deductible. See related updates in the One Big Beautiful Bill Act page: IRS provisions overview.
• True leases usually do not qualify for Section 179, but a $1 buyout or finance lease might. Confirm with your CPA.
• Rentals do not qualify unless converted to a purchase and placed in service.

For financing that fits your projects and timeline, explore Flexible Heavy Equipment Financing.

• Heavy equipment commonly qualifies: excavators, wheel loaders, backhoes, telehandlers, motor graders, and similar machines typically over 6,000 lbs GVWR.
• Trucks and vans used mainly for business can qualify. Those over 6,000 lbs GVWR often allow larger deductions.
• Certain specialized heavy vehicles, like dump trucks, delivery trucks, or cargo vans, usually qualify for full Section 179.
• Passenger cars and light SUVs under 6,000 lbs face much lower limits.

If you are comparing vehicles over 6,000 lbs GVWR, this reference list helps: Vehicles Over 6000 lbs.

• Maximum Section 179 deduction: $2,500,000.
• Phase-out begins when total purchases exceed $4,000,000.
• Heavy SUV first-year cap: $31,300.
• 100% bonus depreciation may apply for qualifying assets placed in service after January 19.

Section 179 and Bonus Depreciation can work together. You apply Section 179 first, then use bonus depreciation on the remaining basis. The combined effect can bring big year-one deductions for qualified equipment, but you cannot deduct more than your business income with Section 179. The phase-out also reduces your available deduction as equipment purchases climb above the phase-out threshold.

For a simple overview of limits and timing, see Section179.org’s guide.

• Maximum deduction: $2,500,000.
• Phase-out starts when total qualifying purchases exceed $4,000,000.
• These higher limits apply for assets placed in service during the year.
• New law updates support larger write-offs for many businesses.

• Certain SUVs and vehicles over 6,000 lbs but under 14,000 lbs have a first-year cap of $31,300.
• Many heavy non-SUV trucks and vans used for work can qualify for larger or full deductions.
• Long-bed pickups (around 6 feet or more) over 6,000 lbs GVWR may avoid the SUV cap, depending on federal classification. Verify the exact model and bed length.
• Off-road heavy equipment like excavators and wheel loaders is not subject to the SUV cap.

Want a plain-English example of the SUV limit? Check out this guide from KBB: Cars Over 6000 Pounds and the tax break.

• For qualifying property placed in service after Jan 19, 100% bonus depreciation may apply.
• Use the expensing first, then apply bonus depreciation to the remaining basis.
• Quick example: a heavy SUV at $90,000 may be limited to $31,300 under the cap, then bonus depreciation can write down more of the cost if eligible.

• Deduct only the business-use percent of cost.
• If business use later drops below 50%, you may have to recapture part of the deduction.
• Keep records that back up your business-use claim for every vehicle or machine.

A simple process keeps you on track and audit-ready.

1. Pick the right machine or vehicle for your jobs.
2. Get it delivered and in use before December 31, 2025.
3. Capture serial numbers, GVWR, delivery docs, and start-date records.
4. Track business use with logs from day one.
5. Work with your CPA to finalize your Section 179 election for tax year 2025.

• IRS Form 4562 details and the Section 179 election.
• Purchase invoice, finance agreement, and proof of delivery.
• VIN or serial numbers, and GVWR where relevant.
• Business-use logs, job tickets, or hour readings.
• Any bonus depreciation schedules if used.

• Example 1: $180,000 excavator at 100% business use. The deduction can deduct the full cost (subject to income limits). At a 24% tax rate, potential tax savings could be about $43,200.
• Example 2: $90,000 heavy SUV used over 50% for business. The deduction limited to $31,300, then consider bonus depreciation on the rest if eligible.
• Example 3: $65,000 pickup over 6,000 lbs GVWR with a long bed used 80% for business. May avoid the SUV cap, with the deduction based on business use percentage. Confirm classification.
• Note: These are estimates. Talk with a tax professional.

• Missing the 12/31/2025 placed-in-service deadline.
• Weak business-use logs or claiming personal commuting as business.
• Taking the deduction on a true lease.
• Ignoring the heavy SUV cap where it applies.
• Forgetting recapture if business use drops below 50%.

A trusted local partner helps you pick the right machine, hit delivery deadlines, and keep uptime high. Line up your year-end equipment purchases, then set your tax plan with confidence.

• See a range of heavy vehicles including mini, compact, medium, and large excavators, telehandlers, wheel loaders, backhoe loaders, and motor graders.
• Get hands-on to confirm fit, productivity, and operator comfort.
• We will schedule demos that align with year-end tax timing.
• CTA: come in for a heavy machinery demo. Explore options on our Heavy Construction Equipment Sales page.

• Many buyers finance and still take Section 179 in the same year.
• Loan interest on qualifying business vehicles may lead to a deduction in 2025.
• Flexible terms and rental purchase options to match your cash flow.
• CTA: in-house financing available. Start here: Flexible Heavy Equipment Financing.

• A rental can convert to a purchase to qualify for Section 179 when bought and placed in service in 2025.
• We help time delivery so the machine is working before December 31.
• CTA: call sales or rental to plan a year-end purchase. View current availability: Heavy Equipment Rentals in Pennsauken.

• Fast parts support and trained technicians for SANY and many other brands.
• Better uptime means stronger job results and more value from your investment.
• CTA: call for parts or service. Get help now: Construction Equipment Repair Services.

The payoff is clear: a faster write-off, improved tax savings, stronger cash flow, and newer equipment that helps crews work faster and safer. For 2025, under Section 179 remember the higher limits, the heavy SUV cap, and potential Bonus Depreciation through 100% bonus depreciation for qualifying assets placed in service after Jan 19, 2025.

Your short checklist: pick the right machine, confirm your business use percentage, place it in service by year-end, and keep clean records.

Visit us at 9300 N Crescent Blvd, Pennsauken, NJ for a heavy machinery demo or schedule a Tow & Show.

Call us to secure inventory and delivery dates, ask for parts or service, and explore our in-house financing.