What to Know About Section 179 in 2026

Section 179 lets your business deduct the full cost of a qualifying work truck or van in the year it goes to work, and the 2026 limits are the highest the deduction has ever had. For contractors, farmers, tradespeople, and fleet managers, that means the truck you need this winter can lower this year’s tax bill instead of spreading deductions across five or more years. The deadline is the catch: for calendar-year businesses, the vehicle has to be placed in service by December 31, 2026.

Section 179 is a federal deduction that lets a business expense qualifying equipment up front instead of depreciating it over time. As a deduction, it lowers your taxable income, so your actual savings depend on your tax rate. For 2026, the deduction limit is $2,560,000, up from $1,250,000 before the One Big Beautiful Bill Act passed in July 2025. The limit shrinks dollar for dollar once a business places more than $4,090,000 of qualifying equipment in service during the year, which keeps the focus on small and mid-size businesses. New and used vehicles both qualify, as long as the vehicle is new to your business. One more rule: Section 179 cannot exceed your business income for the year, though any unused amount carries forward.

Bonus depreciation is now permanent at 100% for vehicles and equipment acquired after January 19, 2025. (Under the old schedule, it would have dropped to 20% this year.) It has no annual dollar cap and no business income limit. It applies to new vehicles and to used vehicles your business has not owned before, and it picks up any cost Section 179 does not cover. Your accountant can use the two together to put the deduction where it helps your business most.

Most do, and the gross vehicle weight rating (GVWR) on the door jamb sticker decides how much. Three kinds of vehicles can generally be deducted in full:

• Pickups rated over 6,000 lbs GVWR with a bed of at least six feet
• Cargo vans with no seating behind the driver
• Cab-and-chassis trucks rated over 14,000 lbs GVWR

Heavy SUVs and short-bed pickups rated between 6,000 and 14,000 lbs GVWR are capped at $32,000 under Section 179, though many tax professionals apply bonus depreciation to the remaining cost. Vehicles rated 6,000 lbs GVWR or less fall under passenger vehicle limits, which hold the first-year deduction to $20,300 with bonus depreciation. Whatever you buy, it must be used more than 50% for business, so keep a mileage log from day one.

The IRS counts a vehicle as placed in service when it is ready and available for its business use, which can be well after the day you sign. A deal signed in December with January delivery counts toward 2027, and so does a cab-and-chassis still waiting on its dump body. Upfits, titling, and financing all take time, and the last two weeks of December go quickly, so plan to take delivery with room to spare.

Your tax professional claims Section 179 and bonus depreciation on IRS Form 4562, filed with your return. Keep your bill of sale, proof of the date the vehicle went into service, and records of business use. Financed vehicles qualify in full in the year they go to work, while true operating leases generally do not. State rules differ, too: Wisconsin follows federal Section 179 but not federal bonus depreciation, and Illinois requires businesses to add federal bonus depreciation back to state income. Talk to a tax professional who files in your state.

Kunes Commercial Truck and Fleet stocks work-ready Ford, Chevrolet, GMC, and Ram trucks and vans, from cargo vans and heavy-duty pickups to service, dump, and box body trucks. Our commercial specialists at Kunes Chrysler Dodge Jeep Ram of Sterling know GVWR ratings, upfit timelines, and the paperwork your accountant will ask for. (Tax strategy we leave to the professionals; payload and towing we will happily talk about all afternoon.) Drive it to work or for work, WE’VE GOT YOU COVERED.

This article is for general educational purposes only and is not tax, legal, or accounting advice. Kunes Auto Group and Kunes Commercial Truck and Fleet do not provide tax advice. Limits, eligibility, and state treatment vary; consult a qualified tax professional about your specific situation. For calendar-year taxpayers, vehicles must be placed in service by December 31, 2026, to qualify for the 2026 tax year.