So, the vehicle tax deduction can allow you to purchase your dream car, basically for free.
Of course, you have to go about this in a very smart and legal way to successfully pull this off.
One of the biggest tips we can share with you is to buy a vehicle that weighs over 6,000 pounds because you are able to write it off 100% in the first year.
Now we don’t know about you, but that sounds like a lot of pounds.
So we decided to do some research and look at some vehicles someone could buy that would qualify for the vehicle tax deduction.
In this post, we’re going to show you 8 cars that you can write off 100% using the vehicle tax deduction and section 179 deduction.
Before we dive into the list, let us quickly explain what the vehicle tax deduction is.
What is Vehicle Tax Deduction?
So, if you operate a business or if you are self-employed, then the tax code is set up in a way that allows you to write off business vehicle expenses and cost.
There are two methods for this:
- You have the standard mileage rate deduction which calculates how many business miles you have driven and gives you a deduction based on that.
- And then you have the actual expenses deduction which allows you to write off the direct costs of the vehicle including depreciation.
Write Off Car With Section 179 Vehicle Tax Deduction
Now if you’re trying to get a vehicle for free, then you want to take advantage of accelerated depreciation through the tax code section 179.
Accelerated depreciation basically allows you to fast forward your expected losses faster, which can be helpful to do during a year where you made a lot of income.
So say, for example, you buy a business vehicle for $50,000. With normal depreciation, you would take about a $10,000 deduction each year over 5 years.
Well with accelerated depreciation, you can take the $50,000 and accelerate the loss in the first year.
Accelerated depreciation is extremely powerful because you could wipe out your taxable income and buy a car without paying any taxes on your income.
This means you’re basically getting the car TAX FREE which for some would be over 40% off.
Now the one stipulation for taking accelerated depreciation on the vehicle tax deduction is that the vehicle must weigh over 6,000 pounds.
And that weight needs to be GVWR or Gross Vehicle Weight Rating, which is the max loaded weight of your vehicle, passengers, and cargo.
So if you have a business, you need a vehicle for business and you need more deductions, then you got to take advantage of the vehicle tax deduction, in general.
So that’s just a very quick overview of the vehicle tax deduction, but If you want to get a deeper dive. then make sure you check out this post on how to write off your dream car.
Now let’s jump into the list of cars in 2021 that weigh over 6,000 pounds that qualify for the section 179 vehicle tax deduction. And by the way, this list is in no particular order.
8 Cars That Qualify For The Section 179 Vehicle Tax Deduction
1. 2021 Tesla Model X
We personally love this car! And if you’re like us, get it whenever you can to strategically use the vehicle tax deduction.
So the 2021 Tesla Model X vehicle GVWR (Gross Vehicle Weight Rating) comes in weighing 6,788 to 6,878 lbs which means it easily qualifies for accelerated vehicle depreciation.
Its MSRP starts at $79,990, now of course you can upgrade it.
But if we just go with the MSRP then this car can give you an estimated $79,990 tax deduction if you use it for business.
We’ve seen some YouTubers using this car for business, so you definitely have to check it out.
2. 2021 Mercedes-Benz G-Class
This one’s also known as the G wagon. It is also a very trending car, often talked about in a lot of pop and hip hop music.
So, the 2021 G wagon GVWR comes in weighing 6,945 to 7,056 pounds. Again, easily coming meeting the criteria for section 179.
Thie vehicle, if accelerated, would give you an estimated $131,750 write-off in year 1. Still crazy to think about.
We’ve seen influencers like Grant Cardon riding around in the G wagon, and we’re willing to bet they’re using the vehicle tax deduction.
3. 2021 Porsche Cayenne
We all know the prestige that comes with the name Porsche. You think about luxury.
Well barely makes the criteria for weight coming in at a GVWR 6,329 to 6,471 lbs is the Porsche Cayenne.
Maybe, as a result, its MSRP is a lot more affordable than the other two coming in at $67,500 giving an accelerated write-off of $67,500 in the first year of ownership.
4. 2021 BMW X5
Similar to the Porsche, the BMW X5 comes in barely making weight at 6,162 lbs.
So another great option for anyone looking for a vehicle for business and gives you an estimated $59,400 tax deduction.
5. 2021 Chevy Suburban
Now, this vehicle is in celebrity territory.
You probably have seen celebrities getting picked up in suburbans because the vehicle is spacious, your safe, you can add armour to it and you get a big fat tax write-off.
So, Chevy Suburban weighs easily qualifies for the section 179 deduction with a GVWR of 7,500 to 7,700 lbs.
The Chevy Suburban would give an estimated $51,500 write-off.
But that’s not a lot for celebrities making millions, so you will find that they upgrade these suburbans to be bulletproof, and sometimes that can drive the cost up to $250,000.
6. GMC Yukon XL
The competitor to the suburban. Majority of the same benefits but just a different brand.
Its GVWR is the same as the suburban at 7,500 to 7,700 lbs which gives an estimated $53,400 tax write-off with accelerated depreciation.
7. Range Rover
Another stylish and safe vehicle. Its GVWR meets the criteria for the accelerated vehicle tax deduction with a weight of 6,834 to 7,077 lbs.
If accelerated, this car can give you a tax deduction of $92,000 in the first year. Not bad at all.
8. Toyota 4Runner
You have a very affordable and reliable vehicle the Toyota 4runner.
Its GVWR is between 6,100 to 6,300 lbs, which means it just qualifies for accelerated vehicle depreciation. This would give it an estimated tax write-off of $36,765 in year one.
There you have it! Before we end this post, we have to mention that if you sell your car for a gain then you do have to pay the depreciation back which called depreciation recapture.
So while this is a great tax benefit, don’t get carried away trying to go even further by taking depreciation and trying to resell it afterwards. You will end up with a big loss.