Section 179 lets a business deduct the cost of a vehicle it buys and puts in service in the year it starts using it, instead of depreciating it over five years, as long as the vehicle is used more than 50% for business.
For tax years beginning in 2026 the overall Section 179 limit is $2,560,000, reduced dollar for dollar once a business places more than $4,090,000 of equipment in service. How much of a vehicle you can write off in year one depends on its gross vehicle weight rating (GVWR): an SUV rated over 6,000 pounds can take up to $32,000 under Section 179 and generally recover the rest of its business cost through 100% bonus depreciation, while a car or crossover rated 6,000 pounds or less is held to the IRS first-year limit of $20,300 with bonus depreciation. This is general information, not tax advice; confirm your own deduction with your tax professional.
| Rule | 2026 amount | Where it comes from |
|---|---|---|
| Section 179 limit | $2,560,000 | IRS Publication 946, tax years beginning in 2026 |
| Phase-out threshold | Limit reduced dollar for dollar above $4,090,000 placed in service | IRS Publication 946 |
| Section 179 cap on an SUV rated 6,001 to 14,000 lb GVWR | $32,000 | IRS Publication 946 |
| Bonus depreciation | 100% for property acquired and placed in service after January 19, 2025 | Section 168(k), as amended in 2025 |
| First-year limit, car or light truck 6,000 lb GVWR or less | $20,300 with bonus depreciation, $12,300 without | Rev. Proc. 2026-15 |
| Later years, same vehicle | $19,800 in year two, $11,900 in year three, $7,160 a year after | Rev. Proc. 2026-15 |
| Business use | More than 50% in the year it is placed in service | Section 280F |
The IRS limits on "luxury" vehicles apply to passenger automobiles rated 6,000 pounds GVWR or less. Above that line an SUV, pickup, or van is not held to those yearly limits. Its Section 179 deduction is capped at $32,000 for 2026, and the rest of its business cost can generally be taken as bonus depreciation, which is 100% for vehicles acquired and placed in service after January 19, 2025.
GVWR is the most the vehicle is rated to weigh loaded, not its curb weight. It is printed on the certification label on the driver's door jamb. Check the label on the exact vehicle you buy, because the rating can change with the trim, the drivetrain, and the model year.
Some vehicles are not held to the $32,000 SUV cap at all: a cargo van with no seating behind the driver's seat, a van that seats more than nine people behind the driver, and a pickup with a cargo bed at least six feet long that is not readily reached from the passenger area. These can qualify for the full Section 179 deduction, within the overall limit.
Ratings vary by trim and year, so read the door-jamb label on the car before you count on it. Dealer lists of qualifying models are a starting point, not the rule.
| Model | Usually rated | How 2026 treats it |
|---|---|---|
| Sprinter Cargo Van | Over 6,000 lb GVWR, no rear seating | Full Section 179, within the overall limit |
| Sprinter Passenger Van (seating more than nine behind the driver) | Over 6,000 lb GVWR | Full Section 179, within the overall limit |
| GLE, GLE Coupe, GLS, Maybach GLS, G-Class | Over 6,000 lb GVWR | Up to $32,000 under Section 179, the rest of the business cost through bonus depreciation |
| Sprinter Crew Van | Over 6,000 lb GVWR, with rear seating | Check with your tax professional whether the SUV cap applies to your configuration |
| C-Class, E-Class, CLA, CLE, GLA, GLB, GLC | 6,000 lb GVWR or less | First-year limit of $20,300 with bonus depreciation |
A business buys a new SUV rated 6,500 pounds GVWR for $70,000 including sales tax, places it in service in 2026, and uses it 100% for business. It can expense $32,000 under Section 179 and take the remaining $38,000 as bonus depreciation, deducting the full $70,000 in 2026. At 80% business use, the deductible base is 80% of the cost, $56,000. A car rated 5,500 pounds bought for the same price and used 100% for business is held to $20,300 in year one with bonus depreciation, and the rest is deducted over the following years under the yearly limits.
What the deduction saves depends on your tax rate. A $70,000 deduction at a 32% federal rate cuts federal income tax by about $22,400 for that year; state tax can add to or subtract from that, because each state, Arizona included, sets its own rules for Section 179 and bonus depreciation.
For tax years beginning in 2026, the maximum Section 179 deduction is $2,560,000, reduced dollar for dollar by the amount of Section 179 property placed in service above $4,090,000 (IRS Publication 946).
Up to $32,000 under Section 179 for an SUV rated 6,001 to 14,000 pounds GVWR, and the rest of its business-use cost can generally be taken as 100% bonus depreciation for a vehicle acquired and placed in service after January 19, 2025. Business use must be more than 50%.
A GLE is generally rated over 6,000 pounds GVWR, so used more than 50% for business it can take up to $32,000 under Section 179 in 2026, with the rest of its business cost generally recoverable through bonus depreciation. Confirm the rating on the door-jamb label of the exact vehicle and the deduction with your tax professional.
A Sprinter Cargo Van with no seating behind the driver, or a Sprinter Passenger Van seating more than nine behind the driver, is not held to the $32,000 SUV cap and can qualify for the full Section 179 deduction within the overall limit, when used more than 50% for business.
No. Section 179 applies to vehicles you buy, including financed ones. On a lease, a business deducts the business share of its lease payments instead, adjusted by the IRS lease inclusion amount for passenger automobiles.
$20,300 in the first year with bonus depreciation, or $12,300 without, then $19,800 in year two, $11,900 in year three, and $7,160 a year after that (Rev. Proc. 2026-15).