Can I claim both Section 179 and bonus depreciation on my gig economy vehicle under 6000 pounds?

You've got a good question about vehicle depreciation! Let me try to clear this up for you. For vehicles under 6,000 pounds used for business, there are indeed limits that apply. The $12,200 you mentioned for 2025 is the maximum Section 179 deduction for passenger vehicles (this limit is adjusted annually for inflation). The bonus depreciation and Section 179 don't stack in the way you're calculating. Instead, there's a first-year depreciation limit for passenger automobiles, which is expected to be around $20,200 for 2025. This is your total combined limit for both Section 179 and bonus depreciation in year one. So if you claimed the maximum Section 179 of $12,200, you could only claim bonus depreciation up to the remaining amount of the first-year limit (approximately $8,000 more). You can't exceed that first-year limit regardless of how you split it between Section 179 and bonus depreciation.

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If you're trying to get clarification directly from the IRS about Section 179 and bonus depreciation for your specific situation (which I highly recommend), good luck actually reaching them. I spent 6+ hours on hold over 3 different days trying to get someone on the phone who could answer my question about vehicle depreciation limits. Finally found https://claimyr.com and their service is incredible for getting through to the IRS. You go to their site, put in your info, and they actually call the IRS for you, navigate all the phone trees, wait on hold, and then call you when they have an IRS agent on the line! Check out how it works here: https://youtu.be/_kiP6q8DX5c I got a clear answer about my specific situation from an actual IRS agent who walked me through exactly how to claim both Section 179 and bonus depreciation correctly on my Form 4562. Totally worth it for the peace of mind knowing my deductions won't trigger an audit.

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One important thing nobody's mentioned yet - if you use your vehicle for BOTH personal and business use like most gig workers do, you HAVE to track your business mileage percentage! The Section 179 and bonus depreciation deductions must be prorated based on your business use percentage. So if you use your vehicle 70% for business and 30% for personal, you can only take 70% of the maximum depreciation amounts everyone's discussing. And if your business use drops below 50% in future years, you might have to deal with "recapture" of excess depreciation you claimed previously. For mileage tracking, I use Stride - it's free and works great for gig drivers. Just remember to turn it on when you start working!

Has anyone actually gone through an IRS audit for vehicle depreciation as a gig worker? I'm wondering what documentation they specifically asked for and what was accepted as proof of business use?

Just wanted to add another perspective on this vehicle depreciation question. I've been driving for gig apps for about 3 years now and have dealt with this exact situation. The key thing to understand is that the $20,200 first-year limit for 2025 is indeed a combined ceiling - you can't exceed it regardless of how you split between Section 179 and bonus depreciation. However, there's a strategic consideration most people miss: if your business income is lower in a given year, Section 179 might be limited by your taxable income, while bonus depreciation generally isn't. For your $52,000 vehicle, assuming 100% business use, you'd be looking at that $20,200 maximum for year one. The remaining $31,800 would be depreciated over the following years using regular MACRS depreciation. One thing I learned the hard way - keep meticulous records of your business vs personal mileage from day one. I use a simple spreadsheet where I log my odometer reading at the start and end of each work session. Takes 30 seconds but saved me during a correspondence audit last year. Also, consider talking to a tax professional who specializes in gig work. The vehicle depreciation rules are complex, and getting it wrong can be costly. The peace of mind is worth the consultation fee.

This is such a timely question! I just went through this exact scenario with my tax preparer for my 2024 return using a vehicle I bought for my delivery work. One thing that really helped me understand the limits was realizing that the IRS treats passenger vehicles (under 6,000 pounds) differently than heavier commercial vehicles. The annual depreciation limits exist specifically to prevent people from taking huge deductions on luxury cars used partially for business. For your $52,000 vehicle, the math would work like this for 2025: You can take a maximum of $20,200 in the first year (this is the combined limit for Section 179 + bonus depreciation). You could structure this as $12,200 Section 179 plus $8,000 bonus depreciation, or any other combination that doesn't exceed $20,200 total. The remaining $31,800 ($52,000 - $20,200) gets depreciated over the next 4 years using the annual limits, which are much smaller amounts each year. One strategy my tax preparer suggested was to elect out of bonus depreciation entirely if I expect higher income in future years, since it would allow me to spread the deductions more evenly. But for most gig workers wanting maximum deductions upfront, taking the full $20,200 first-year limit makes sense. Definitely keep detailed mileage logs from day one - that business use percentage is crucial for all these calculations!