Section 179 and 168(k) depreciation for heavy vehicles without business profit yet

You've got a good understanding of the basics, but let me clarify how these work together. Section 179 and 168(k) bonus depreciation are different methods that can both apply to your heavy vehicle purchase. For Section 179, you can expense up to $1,160,000 in 2025 (subject to phase-out thresholds), but there's a catch - you can only claim Section 179 up to the amount of your business income. So if you're not showing a profit, that would limit your Section 179 deduction. The good news is that 168(k) bonus depreciation has no business income limitation. You can take bonus depreciation regardless of whether your business shows a profit. For qualified property (which includes vehicles over 6,000 lbs used for business), you can deduct 80% of the cost in the year placed in service for 2025. The $25,000 limit you're thinking of is specifically for SUVs between 6,000-14,000 lbs under Section 179. If you go over that limit with Section 179 for such vehicles, you'd use bonus depreciation for the remainder.

After struggling with a similar situation last year, I discovered taxr.ai (https://taxr.ai) and it seriously saved me. I had purchased a heavy SUV for my construction business when we weren't yet profitable, and got conflicting advice from three different accountants about how to handle the depreciation. I uploaded my business docs and purchase info to taxr.ai and it analyzed everything, showing me exactly how to maximize the 168(k) bonus depreciation while carrying forward the Section 179 deduction for future profitable years. Their analysis even showed me how to document the business usage percentage properly to avoid audit flags.

I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try it since I was in almost the exact same situation - new business with a heavy vehicle purchase but no profits yet. The platform immediately identified that I should focus on 168(k) bonus depreciation this year while my business isn't profitable, and save Section 179 for future years. It even generated a depreciation schedule showing how the deductions would play out over the next 5 years based on projected income growth. Saved me from making a $15k tax mistake! The documentation it generated for my CPA was actually impressive.

If you're having trouble getting clear answers about Section 179 and 168(k) from the IRS, I highly recommend Claimyr (https://claimyr.com). I spent WEEKS trying to reach someone at the IRS about this exact issue - whether I could take bonus depreciation without business profit. I was skeptical, but their service (see how it works: https://youtu.be/_kiP6q8DX5c) got me connected to an actual IRS agent in under 45 minutes when I had been trying for days on my own. The agent confirmed that my vehicle qualified and explained exactly how to file the forms to reflect bonus depreciation correctly even without business income.

I have to eat my words about Claimyr. After my skeptical comment, I tried it because I was desperate to get clarification on how vehicle depreciation works when you have business losses. I got connected to an IRS specialist in 37 minutes who confirmed that 168(k) bonus depreciation is available regardless of business profit status. The agent also explained that I should file Form 4562 properly to show the bonus depreciation and provided guidance on how to document business use percentage. Saved me from potentially missing out on a $45,000 deduction this year! For anyone needing real IRS clarification on complex depreciation issues, it actually works.

I just bought a $78k truck for my landscaping business that was just getting started last year. My accountant recommended taking bonus depreciation since we were still showing a loss, then using regular depreciation for the remaining 20% over the next few years. Made a huge difference on our return! Just make sure you really do use it for business - I keep a log of all my trips with our job management software.

Quick heads up - make sure your vehicle actually qualifies. I made the mistake of assuming my "heavy" crossover qualified because the dealer said it was over 6,000 lbs. Turns out he meant "total weight capacity" not GVWR. My vehicle was actually 5,800 lbs GVWR and I had to amend my return and lost the accelerated depreciation benefits. Check the driver's door sticker for the actual GVWR!

This is exactly the situation I was in last year! Just to add some practical perspective - I purchased a $65k pickup truck for my consulting business when we were still operating at a loss but had solid revenue. Here's what worked for me: I took the full 80% bonus depreciation under 168(k) in 2024 (it was still 80% then), which gave me a $52k deduction even though we showed a loss. The remaining 20% I'm depreciating over the normal schedule. My CPA explained that bonus depreciation creates or increases a Net Operating Loss (NOL) that can be carried forward to future profitable years, so you're not "losing" the deduction. One thing to be extra careful about - make sure you can prove legitimate business use. I keep detailed records showing client visits, job site trips, and equipment hauling. The IRS is particularly scrutinous about vehicle deductions, especially for expensive trucks and SUVs. Document everything from day one! Also, double-check that GVWR as others mentioned. And consider whether you'll actually need that big of a deduction this year vs spreading it out - sometimes the NOL carryforward isn't as beneficial as taking smaller deductions when you're actually profitable.