Section 179 Business Vehicle Tax Estimator

Calculate first-year write-offs, heavy vehicle exemptions, and cash tax reduction

Methodology current as of October 2026, reflecting 2026 tax-year limits.

What This Calculator Estimates

The vehicle write-off calculator answers one question: how much of a business vehicle's purchase price can you deduct in the first year, and what is that deduction worth in real dollars at your marginal tax rate? It models the two first-year depreciation tools — Section 179 expensing (IRC §179) and bonus depreciation (IRC §168(k)) — plus the IRS limits that cap them for certain vehicle types.

It does not file your taxes, choose your strategy, or replace a CPA. It shows the arithmetic so you walk into that conversation informed. This page documents every rule, limit, and assumption in that arithmetic.

The Calculation, Step by Step

For each estimate, the calculator runs these steps in order — the same order the IRS rules apply them:

Step 1 — Business basis. Only the business-use portion of the vehicle is depreciable. The calculator multiplies the purchase price by your business-use percentage.

Depreciable basis = Purchase price × Business-use %

Step 2 — The 50% eligibility gate. If business use is 50% or less, the vehicle is ineligible for Section 179 and bonus depreciation entirely; it must use straight-line MACRS instead. The calculator requires more than 50% business use before any first-year deduction is shown.

Step 3 — Classify the vehicle. Your selection determines which IRS limits apply:

Heavy truck (over 6,000 lbs GVWR, 6-ft+ bed or cargo van) → full expensing, no SUV cap
Heavy SUV (6,000–14,000 lbs GVWR) → Section 179 capped at $32,000
Passenger car / crossover (under 6,000 lbs) → luxury auto limits (§280F)

Step 4 — Apply Section 179 first. Section 179 is claimed before bonus depreciation. For heavy trucks, the full business basis qualifies. For heavy SUVs, Section 179 is limited to $32,000 (the 2026 SUV limit under §179(b)(5)). For passenger vehicles, the combined first-year luxury limits cap the total.

Step 5 — Apply bonus depreciation to the remainder. For 2026, bonus depreciation is 100% of the remaining depreciable basis — restored permanently by the 2025 tax legislation. Heavy SUVs over 6,000 lbs GVWR are not subject to the §280F luxury limits on this bonus portion; passenger vehicles under 6,000 lbs are.

Step 6 — Convert the deduction to dollars. The total first-year deduction is multiplied by the combined marginal tax rate you enter (federal bracket + state income tax rate).

Net tax reduction = Total first-year deduction × Combined marginal rate
Effective net cost = Purchase price − Net tax reduction

2026 Limits We Use

Section 179 deduction limit: $2,560,000 of qualifying property placed in service (phase-out begins at $4,090,000 of total placed-in-service property). Typical single-vehicle purchases never approach these thresholds.
Heavy SUV Section 179 cap: $32,000 (§179(b)(5)). The remainder of the basis takes 100% bonus depreciation.
Passenger vehicle first-year limits (§280F): $12,200 of Section 179 plus $8,100 of additional first-year bonus = $20,300 total.
Bonus depreciation: 100% for qualifying property placed in service in 2026.
Business-use threshold: greater than 50% required for Section 179 and bonus.

These figures are indexed for inflation and change each tax year. We review and update them every fall for the coming tax year, and publish the current numbers in our 2026 deduction limits guide.

Key Assumptions

Placed in service this tax year. The estimate assumes the vehicle is purchased, delivered, and available for business use by December 31 of the current tax year.
New to you. Used vehicles qualify as long as their first use is by the taxpayer claiming the deduction. A vehicle you already owned and used personally does not.
Sufficient taxable income. The estimate assumes your business income can absorb the full deduction. In reality, Section 179 is limited to taxable income (unused amounts carry forward), while bonus depreciation has no income limit.
You own the vehicle. Leased vehicles generally cannot be expensed by the lessee — the lessor claims depreciation. See our leased vehicles guide.
Your combined rate is a marginal rate. The tax-rate input should be your marginal (not average) combined federal + state income-tax rate — the rate on the last dollar of income the deduction offsets.
State conformity not modeled. States vary widely in whether they follow federal bonus depreciation; several require an add-back. Check our 50-state conformity hub.

What the calculator intentionally does not model: depreciation recapture if business use falls below 50% or the vehicle is sold early; Section 179 carryforward mechanics; trade-in basis adjustments; vehicles over 14,000 lbs GVWR (not subject to §280F at all — treated here in the heavy-truck class); and the interaction with the qualified business income (QBI) deduction. These are real factors for some buyers, and they are exactly the things worth confirming with a CPA.

Why Your CPA's Number Might Differ

If a tax professional gives you a different figure than this calculator, the most common reasons are:

Income limitation: Section 179 cannot exceed your business's taxable income; the excess carries forward. The calculator assumes full absorption.
State add-back: your state may decouple from federal bonus depreciation, reducing the state-side benefit.
Marginal vs. effective rate: using an average tax rate instead of a marginal rate understates the savings.
Stacking choices: some CPAs elect out of bonus depreciation or limit Section 179 deliberately (for example, to preserve QBI deduction headroom).

None of these make the calculator wrong — they make it a starting estimate. Walk in with our number, ask about these four items, and you'll get to the right answer faster.

Sources

Internal Revenue Code §179 (election to expense) and §179(b) dollar limitations
Internal Revenue Code §168(k) (bonus depreciation) and §280F (luxury automobile limits)
IRS Publication 463 (travel, gift, and car expenses) and Publication 946 (depreciation)
Annual IRS Revenue Procedures setting inflation-adjusted §179, §179(b)(5), and §280F limits

Run the Calculator →

Estimate your own vehicle's first-year deduction.

See a Worked Example →

Three real scenarios, step by step.

Section 179 FAQ →

12 common questions, plain-English answers.