At a glance
- What it is
- Writing off the business-use share of a heavy SUV, pickup, or van in the first year, using 100% bonus depreciation.
- What it saves
- Income tax in the year you buy, instead of spreading the deduction over several years.
- Best fit
- Owners who truly drive for business.
- Main catch
- Business use must stay above 50%, backed by a mileage log, or part of the deduction comes back as income.
- Weight test
- Gross vehicle weight rating (GVWR) over 6,000 pounds, shown on the driver’s door sticker. Not the curb weight.
Key takeaways
- SUVs, pickups, and vans with a GVWR over 6,000 pounds can have their business-use share written off in year one with 100% bonus depreciation.
- It fits owners who truly drive for business, like contractors, trades, field service, and sales, and need a vehicle anyway.
- In the illustrative example, an $80,000 SUV used 80% for business produces a $64,000 deduction, worth up to about $15,360 in federal tax.
- The catch: business use must stay above 50%, backed by a mileage log, and selling the vehicle brings depreciation back as ordinary income.
Watch the story
A one-minute story about this strategy. Illustrative story; the people are fictional and are not clients. See all story videos.
The numbers
Picture an S corp that buys an $80,000 SUV with a GVWR over 6,000 pounds. The owner’s mileage log shows 80% business use.
For illustration purposes. Tax law may change, which may change these calculations slightly.
| Vehicle cost | $80,000 |
| Business-use share | 80% |
| Year-one deduction with 100% bonus depreciation ($80,000 × 80%) | $64,000 |
| Personal-use share, not deductible | $16,000 |
Because an S corp’s profit flows to the owner’s personal return, a $64,000 deduction lowers the owner’s taxable income. At a 24% federal bracket, that is worth up to about $15,360 in federal income tax ($64,000 × 24%), less if the deduction drops part of the income into a lower bracket or the owner also claims the QBI deduction. It also lowers the owner’s Oklahoma income tax.
A big deduction now means a smaller one later. The vehicle has no basis left to depreciate in future years, and when you sell it, the gain up to the depreciation you took is taxed as ordinary income. Buy the vehicle because the business needs it, not for the write-off.
Could this strategy work for your business?
In a free tax analysis, your tax strategist checks whether it fits and what it could save, using your real numbers.
How it works
- Check the GVWR. It must be over 6,000 pounds. Many full-size SUVs and pickups qualify; most crossovers and sedans don’t.
- Buy it in the business’s name and put it in service. The vehicle must be placed in service, not just ordered, by December 31 to count for this year.
- Use it more than 50% for business. Commuting doesn’t count as business use.
- Keep a mileage log. Date, miles, destination, and business purpose for every business trip, plus total miles for the year.
- Claim bonus depreciation on the business share. 100% bonus depreciation writes off the business-use share in year one.
Who it fits
- Owners who truly drive for business: contractors, trades, field service, sales, and owners who visit job sites or clients.
- Profitable businesses that need a vehicle anyway and want the deduction in the year of purchase.
When it doesn’t fit
- Vehicles used mostly for commuting or family errands.
- Owners who won’t keep a mileage log.
- Low-income years, when a large deduction saves little and might be better spread out.
The rules
- 100% bonus depreciation. The July 2025 federal tax law permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. New and used vehicles can qualify.
- Over 6,000 pounds GVWR. Vehicles at or under that rating are subject to yearly “luxury auto” depreciation caps.
- More than 50% business use. Required to use bonus depreciation on a vehicle. Section 179 expensing has a separate, lower cap for heavy SUVs; bonus depreciation doesn’t.
- Recapture. If business use later drops to 50% or below during the vehicle’s recovery period, the extra depreciation you took is added back to income.
- Personal use of a company vehicle. When an S corp owns the vehicle, the owner’s personal use is a taxable fringe benefit, reported on the owner’s W-2, unless the owner reimburses the company.
Risks to weigh
- No mileage log. Without a log, the IRS can disallow the business-use percentage and the deduction with it.
- Overstated business use. A claimed 100% business use on the family’s only SUV rarely holds up.
- Tax on sale. Selling or trading in the vehicle brings back depreciation as ordinary income.
How we handle it for clients
With a Cannon & Brown tax plan, we talk before you buy: we check whether the vehicle qualifies, model the deduction against your income for the year, decide whether to take it all now or spread it out, and set you up with a simple mileage log. Because our technology keeps your numbers current all year, we can test this strategy against your real numbers and adjust it as your business changes.
Illustrative example. The business owner and figures on this page are hypothetical, used to explain how the strategy works. They are not a client and not a promise of results. The example assumes an S corp buys an $80,000 vehicle with a GVWR over 6,000 pounds, places it in service in 2026, uses it 80% for business, and the owner is in a 24% federal bracket. This page is educational and is not tax advice for your situation; tax rules and limits change.
Brooks leads Cannon & Brown Tax Advisors, a forward-thinking tax firm serving business owners in Oklahoma and beyond. He builds year-round tax strategies that help business owners keep more of what they earn and reach their goals. More about Brooks
Common questions about heavy vehicles and bonus depreciation
Does a used truck qualify for bonus depreciation?
Yes. New and used vehicles can qualify, as long as the vehicle is placed in service and used more than 50% for business.
Where do I find a vehicle’s GVWR?
On the sticker on the driver’s door. The test is a gross vehicle weight rating over 6,000 pounds, not the curb weight.
What’s the difference between Section 179 and bonus depreciation on a heavy SUV?
Section 179 expensing has a separate, lower cap for heavy SUVs; bonus depreciation doesn’t. Bonus depreciation on a vehicle requires more than 50% business use.
Does the vehicle have to be delivered by December 31?
It must be placed in service, not just ordered, by December 31 to count for that year.
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