Section 179 Tax Deduction
Maximize Your Business Savings with Covert Buick GMC
If you’re a business owner in Austin, Texas looking to lower your tax bill while upgrading your commercial fleet, the Section 179 tax deduction could be your smartest move yet. At Covert Buick GMC, we’re here to help you understand how this IRS tax incentive works and which Buick and GMC vehicles may qualify under the 2025 guidelines.
Quick Reference: 2025 Section 179 Limits
| Max Deduction (2025): | $1,250,000 (phased out above $3,130,000) |
| Bonus Depreciation (2025): | 40% (applies after Section 179) |
| New & Used Equipment: | Qualifies for full Section 179 deduction |
| Specialized (Non‐Passenger) Vehicles: | No special limit (treated like equipment) |
| SUVs & Trucks >6,000 lbs GVWR: | $31,300 max first‐year Section 179; remainder depreciated |
| Business‐Use Requirement: | >50% business use; deduction limited to % of business use |
What Is the Section 179 Deduction?
Section 179 of the IRS tax code lets business owners write off the entire purchase price of qualifying equipment, including vehicles, in the same tax year it’s placed in service. Instead of spreading depreciation over several years, Section 179 allows for an immediate deduction, putting cash back into your business when you need it most.
2025 Section 179 Deduction Limits
For the 2025 tax year, the IRS has set the following limits:
- Maximum Deduction: $1,250,000
- Phase-Out Threshold: Begins at $3,130,000
- Total Equipment Purchase Cap (after which deduction is fully phased out): $4,380,000
- Bonus Depreciation: 40% (applies after Section 179 limits are met)
- SUV Deduction Cap: $31,300 for certain vehicles over 6,000 lbs but under 14,000 lbs GVWR
These limits make 2025 a powerful year for business owners ready to invest in their operations.
How Do Section 179 Limits and Phase-Out Work?
Here’s how it breaks down:
- If your business spends less than $3,130,000 on qualifying equipment, you can deduct up to $1,250,000.
- If you spend more than that, your deduction is reduced dollar-for-dollar.
- Once you hit $4,380,000 in total equipment purchases, Section 179 deductions are no longer available for that tax year.
This deduction was designed to support small and mid-sized businesses looking to invest and grow.
How Does Section 179 Apply to Business Vehicles?
Many Buick and GMC vehicles at Covert Buick GMC may qualify for a full or partial Section 179 deduction depending on their Gross Vehicle Weight Rating (GVWR) and business use.
Eligible vehicles include:
- GMC Sierra 1500 & 2500 HD
- GMC Yukon & Yukon XL
- GMC Savana Cargo Van
- Buick Enclave (partial deduction based on use and weight class)
To qualify, vehicles must:
- Be used for business at least 50% of the time
- Be purchased (or financed/leased with qualifying terms) and placed in service by December 31, 2025
- Meet GVWR and IRS eligibility guidelines
Carryover Rules & Limitations
Section 179 cannot create a loss for your business—it’s limited to your taxable business income. If your deduction exceeds your taxable income, the remaining amount may be carried forward and deducted in future years. Bonus depreciation can also help recover costs not covered by Section 179 in the same year.
Example: How Does Section 179 Generate Real Tax Savings?
Let’s say you purchase a 2025 GMC Sierra 2500 HD for $70,000 and use it exclusively for business:
- Deducted via Section 179: $70,000
- Assumed Tax Rate: 35%
- Potential Tax Savings: $24,500
That’s $24,500 off your tax bill—just for purchasing a truck your business already needs
Shop Section 179-Eligible Vehicles at Covert Buick GMC
At Covert Buick GMC in Austin, TX, we have a large selection of Section 179-eligible commercial and work vehicles. Whether you need a dependable truck, SUV, or van, we’ll help you find the right vehicle and guide you through the qualification process.
We proudly serve business owners across Austin, Round Rock, Cedar Park, and all of Central Texas.
Don’t Wait—Claim Your 2025 Tax Savings Today
Visit Covert Buick GMC to explore qualifying vehicles, learn more about the Section 179 deduction, and get behind the wheel of a vehicle that works as hard as you do.
Have questions? Contact our team today or schedule a consultation with a Commercial Vehicle Specialist.
What is the Section 179 Deduction?
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.
Section 179 is more beneficial to small businesses than ever.
Section 179 is one of the few government incentives available to small businesses, and has been included in many of the recent Stimulus Acts and Congressional Tax Bills. Although large businesses also benefit from Section 179 or Bonus Depreciation, the original target of this legislation was much needed tax relief for small businesses – and millions of small businesses are actually taking action and getting real benefits.
Businesses use Section 179 to purchase needed equipment:
For most small businesses, the entire cost of qualifying equipment can be written-off on the 2024 tax return (up to $1,220,000).
Section 179 does come with limits – there are caps to the total amount written off ($1,220,000 for 2024), and limits to the total amount of the equipment purchased ($3,050,000 in 2024). The deduction begins to phase out on a dollar-for-dollar basis after $3,050,000 is spent by a given business (thus, the entire deduction goes away once $4,270,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.
Who Qualifies for Section 179?
All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2024 should qualify for the Section 179 Deduction (assuming they spend less than $4,270,000).
Most tangible goods used by American businesses, including “off-the-shelf” software and business-use vehicles, like the Sprinter, qualify for the Section 179 Deduction.
For basic guidelines on what property is covered under the Section 179 tax code, please refer to the list of qualifying models. If the vehicle is leased/purchased and placed in service prior to December 31 of the tax year you are filing taxes for and meets certain other conditions.
For 2024, $1,220,000 of assets can be expensed; that amount phases out dollar for dollar when $3,050,000 of qualified assets are placed in service.
What vehicles are allowed?
Covert Buick GMC Austin offers several SUVs over 6,000 pounds that may qualify for the Section 179 Tax Deduction. IRS Publication 946 mentions the maximum expense deduction for an SUV over 6,000 pounds as being $30,500 for 2024.* The following vehicles are included but are not limited to.
*Disclaimer: Please consult with your tax advisor for more details on the possible tax deductibility.
Covert Qualifying Models
GMC
Yukon
GMC
Yukon XL
GMC
Sierra 1500
GMC
Sierra 2500HD
GMC
Savana Cargo Van
Buick
Enclave (Partial deduction based on use and weight class)
What’s the difference between Section 179 and Bonus Depreciation?
Bonus depreciation is only offered in select years. For 2024, it is being offered at a 60% reduction.
The most important difference is both new and used equipment qualify for the Section 179 Deduction (as long as the used equipment is “new to you”), while historically Bonus Depreciation has only covered new equipment until the most recent tax law passed. In a switch from recent years, the bonus depreciation now includes used equipment.
Bonus Depreciation is useful to very large businesses spending more than the Section 179 Spending Cap (currently $3,050,000) on new capital equipment. Also, businesses with a net loss are still qualified to deduct some of the cost of new equipment and carry forward the loss.
When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business had no taxable profit, because the unprofitable business is allowed to carry the loss forward to future years.