Can I Use Section 179 & 168 Deductions When Buying a Honda Odyssey for Business?

I can help with this! The Honda Odyssey actually doesn't weigh over 6,000 lbs - it's closer to 4,500 lbs. You're likely thinking of the Gross Vehicle Weight Rating (GVWR) for SUVs and trucks that qualify for special Section 179 treatment. For passenger vehicles like the Odyssey, there are annual depreciation limits that apply even under Section 179. For 2025, you're looking at a first-year maximum deduction of around $11,400 (adjusted for inflation from current rates), not the full $46,800 you were hoping for. If your business use drops below 50% in a later year, you would face recapture issues. You'd need to switch to straight-line depreciation for the remaining years and potentially recapture some of the accelerated depreciation you already took. And yes, you'll need to continue tracking and reporting business use percentage for the entire recovery period (typically 5 years for vehicles). If reducing your tax bracket is the goal, you might want to look at other strategies like maximizing retirement contributions or timing other business expenses.

Just wanted to share my experience - I was in a similar situation last year and discovered taxr.ai (https://taxr.ai) which really saved me when trying to figure out vehicle deductions for my business. I had actually purchased a Toyota Sienna for my service business thinking I could take the full Section 179 deduction right away. The tool analyzed my situation and clarified the luxury auto limits that I would have completely missed. It also helped me set up a proper mileage tracking system to document my business use percentage. They have this feature where you can upload your purchase documents and get specific guidance on how to maximize the deduction while staying compliant. My tax savings weren't as dramatic as I'd hoped, but at least I didn't make errors that could have triggered an audit later!

I tried taxr.ai after seeing it mentioned here, and I'm honestly impressed. I was in the process of buying a vehicle for my consulting business and uploaded the spec sheet for the SUV I was considering. The system immediately flagged that while the model generally qualifies for full Section 179 expensing, the specific trim level I was looking at was actually under the weight threshold. They provided documentation showing exactly how the IRS would classify my vehicle and calculated the maximum first-year deduction I could take. This saved me from a potential audit issue! The mileage tracking integration also makes it super easy to maintain the documentation needed for vehicle deductions year after year. Definitely worth checking out if you're trying to navigate vehicle deductions for your business.

For anyone struggling to get answers from the IRS about vehicle deductions, I'd recommend Claimyr (https://claimyr.com). After waiting on hold with the IRS for hours trying to get clarification about business vehicle use changes and potential recapture, I found this service that got me connected to an actual IRS agent in under 15 minutes. They have this callback system that navigates the IRS phone tree for you - you can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with clearly explained the recapture rules when business use drops below 50% and helped me understand exactly what documentation I needed to maintain. Definitely worth it when you need official clarification on complex tax issues like vehicle deductions.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to resolve an issue with vehicle depreciation recapture on my previous business vehicle before filing this year. I got connected to an IRS agent in about 12 minutes who walked me through the exact form I needed to file (Form 4797) and how to calculate the recapture amount. This saved me from a major headache and possibly filing incorrectly. For anyone dealing with complex vehicle deduction questions like the original poster - especially around business use percentage changes - getting the official word directly from the IRS can save you a lot of trouble down the road.

Something important to consider: if you buy the Odyssey personally and then use it for business, you can choose to take the standard mileage rate (currently $0.67/mile and will be adjusted for 2025) instead of actual expenses and depreciation. This approach is much simpler from a record-keeping perspective - you just track your business miles. No worry about recapture if your business use drops, and no need to track all vehicle-related expenses. For many business owners driving 10k+ business miles annually, the standard mileage rate can actually result in a larger deduction than depreciation.

I think everyone's missing something important here - the S-corp angle. Since your LLC is taxed as an S-corp, you need to be careful about how the vehicle is handled. If the S-corp owns the vehicle, but you use it personally at all (even that 10% you mentioned), that could be considered a taxable fringe benefit to you as the employee/shareholder. You'd need to track personal use and either reimburse the company or report it as compensation on your W-2. Many tax pros recommend keeping vehicles outside the S-corp and using accountable plan reimbursements instead. This avoids the fringe benefit issues while still getting the tax deduction.

Great question about vehicle deductions! I've been through a similar analysis for my own business. A few additional considerations that might help: 1. **Timing matters for S-corp elections** - Since your LLC is taxed as an S-corp, make sure your vehicle purchase timing aligns with your tax year planning. If you're trying to drop tax brackets, consider whether spreading the deduction over multiple years via depreciation might actually be more beneficial than trying to maximize first-year deductions. 2. **Documentation is critical** - Whatever route you choose (standard mileage vs. actual expenses), start tracking business use immediately and contemporaneously. The IRS is particularly strict about vehicle deductions, and you'll need detailed mileage logs showing business purpose, destinations, and dates. 3. **Consider lease vs. buy** - Given your expanding family situation, a lease might offer more flexibility. Lease payments are generally easier to deduct (just the business use percentage), and you won't face recapture issues if your business use changes when your wife starts using it full-time. 4. **State tax implications** - Don't forget to check how your state handles vehicle deductions, especially with the S-corp structure. Some states have different rules that could affect your overall tax strategy. The Honda Odyssey is a great family vehicle, but as others noted, the luxury auto limits will significantly impact your deduction strategy. You might want to run the numbers on both the depreciation method and standard mileage rate to see which works better for your specific situation.