Section 179 Tax Savings: Definition, How It Works, and FAQ
Section 179 Tax Savings: Deduction Limits and FAQs in Salem
Building a successful company takes dedication and often comes with sacrifices. At BMW of Salem, we're happy to help local businesses maximize their potential by taking advantage of Section 179 tax deductions. Explore key highlights to learn more, or contact our team to receive additional insight today.
What Are the Limits for 2025?
Section 179 eligibility requires vehicles to be used for business more than 50 percent of the time, with additional deduction limits based on vehicle category and the Gross Vehicle Weight Rating (GVWR). Your deduction limit is the maximum allowance you can spend on qualifying equipment. Above the Deduction Limit, your savings phase out at a dollar-for-dollar rate until the Spending Cap is reached. Bonus Depreciation can be used in addition to Section 179, helping businesses near Oregon City offset equipment depreciation during the first year of service.
- Deduction Limit up to $2,500,000
- Spending Cap up to $4,000,000
- Bonus Depreciation up to 100 percent
Eligible Vehicles for Section 179
Most large trucks and vans used by businesses near Lake Oswego qualify with a GVWR over 6,000 pounds. New BMW SUVs near Corvallis with a GVWR over 6,000 pounds, such as the BMW X5 or BMW X7, have a maximum individual deduction of $31,300.
New BMW models for sale near McMinnville that fall under the GVWR threshold include the BMW X3 SUV, BMW 5 Series Sedan, or the BMW i7 Sedan. These models and other light passenger vehicles have a deduction limit of $12,200 and a bonus depreciation limit of $8,000.
Can I Use Section 179 Every Year?
Yes, Section 179 is an annual tax election that incentivizes smaller businesses to reinvest their profits toward further growth by deducting the purchase price of qualifying equipment near Albany. While the Deduction Limit, Spending Cap, and Bonus Depreciation may change year-to-year, Section 179 provides substantial tax relief when your business needs it most. Businesses near Newport and across the state can also claim depreciation on their Oregon state tax returns.
How Do I Calculate Potential Savings?
Section 179 tax deductions can be calculated in four steps:
- Determine the usage-based value of qualifying equipment by multiplying the total cost and the in-service percentage. For a $50,000 vehicle used 60 percent of the time, this value would be $30,000.
- Apply usage-based values towards the 2025 Deduction Limit of $2,500,000. You will need to pay attention to the GVWR, as SUVs and light vehicles in the Keizer area have additional restrictions.
- Calculate phased-out deductions for qualifying purchases between the Deduction Limit and Spending Cap. If you spent $4,500,000 on qualifying purchases, your maximum deduction will become $2,000,000.
- Apply the final deduction amount from your total net taxable income during the eligible tax year. If deductions exceed your income, net losses can be carried to future tax years for added savings.
Compare and Test Drive New BMW Models in Salem
When you're ready to browse new BMW vehicles that qualify for Section 179 tax deductions, BMW of Salem is here to help. We're happy to help businesses explore a wide range of sedans, SUVs, and electrified vehicles designed with fleets in mind. Explore available models online, contact us for additional assistance, or visit our showroom to meet with a representative today.
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BMW of Salem
1151 Van Ness Ave NE
Salem, OR 97301
- Sales: 855-817-8986
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