Section 168 and Your GMC Commercial Truck
Businesses that have added a 2025 GMC Sierra HD to their work fleet may be eligible for a tax deduction under Section 168. This deduction has helped several business customers at McGuire Buick GMC save money on their vehicles. You can take advantage of this tax break by understanding these key factors.
What is Section 168?
Section 168 of the Internal Revenue Code outlines the Modified Accelerated Cost Recovery System (MACRS), which governs property depreciation for tax purposes. A key component of this section is the provision for bonus depreciation under Section 168(k), allowing businesses to take an additional first-year depreciation deduction on qualified property, including certain vehicles.
Section 168 Benefits
The primary benefit of Section 168(k) bonus depreciation is the immediate tax relief it offers. By accelerating depreciation deductions, businesses can reduce their taxable income in the year of acquisition, thereby improving cash flow and providing funds for reinvestment. Notably, for property placed in service during 2024, the bonus depreciation rate is 60%, allowing businesses to deduct 60% of the property's cost upfront, with the remaining balance depreciated over the asset's useful life.
What Vehicles Qualify?
Vehicles that qualify for Section 168(k) bonus depreciation generally include those used more than 50% for business purposes and meet specific weight classifications. Heavier vehicles, such as SUVs, trucks, and vans with a Gross Vehicle Weight Rating (GVWR) over 6,000 pounds, may be eligible for deductions. There are exceptions:
• Vehicles used primarily for personal purposes don’t qualify.
• The bonus depreciation percentage decreases annually, dropping to 40% in 2025 and 20% in 2026, before being phased out entirely unless legislative action extends it.
• While you may be able to use this deduction in conjunction with Section 179, terms and conditions also apply here; rather than guessing or assuming, speak to an accountant or other tax professional.
Find Deductions for the 2025 GMC Sierra HD in Little Falls, NJ
Need to learn more about Section 168 and what it means for your company? Visit McGuire Buick GMC today to discuss your options with our financing and tax experts.
What is Section 168?
Section 168 of the Internal Revenue Code outlines the Modified Accelerated Cost Recovery System (MACRS), which governs property depreciation for tax purposes. A key component of this section is the provision for bonus depreciation under Section 168(k), allowing businesses to take an additional first-year depreciation deduction on qualified property, including certain vehicles.
Section 168 Benefits
The primary benefit of Section 168(k) bonus depreciation is the immediate tax relief it offers. By accelerating depreciation deductions, businesses can reduce their taxable income in the year of acquisition, thereby improving cash flow and providing funds for reinvestment. Notably, for property placed in service during 2024, the bonus depreciation rate is 60%, allowing businesses to deduct 60% of the property's cost upfront, with the remaining balance depreciated over the asset's useful life.
What Vehicles Qualify?
Vehicles that qualify for Section 168(k) bonus depreciation generally include those used more than 50% for business purposes and meet specific weight classifications. Heavier vehicles, such as SUVs, trucks, and vans with a Gross Vehicle Weight Rating (GVWR) over 6,000 pounds, may be eligible for deductions. There are exceptions:
• Vehicles used primarily for personal purposes don’t qualify.
• The bonus depreciation percentage decreases annually, dropping to 40% in 2025 and 20% in 2026, before being phased out entirely unless legislative action extends it.
• While you may be able to use this deduction in conjunction with Section 179, terms and conditions also apply here; rather than guessing or assuming, speak to an accountant or other tax professional.
Find Deductions for the 2025 GMC Sierra HD in Little Falls, NJ
Need to learn more about Section 168 and what it means for your company? Visit McGuire Buick GMC today to discuss your options with our financing and tax experts.
