Important Tax Deduction for Sprinter VansChristopher Wibbe
When you purchase a fantastic Mercedes Sprinter van, you’re opening yourself up to several distinct benefits. These wonderful luxury vehicles offer an excellent combination of luxury and practicality, with numerous uses across several industries.
At Warner Vans of Utah, we’re here to tell you about these benefits plus one other that some potential buyers may not consider: Tax benefits. That’s right, if you’re purchasing Sprinter vans for a business reason, there’s a very good chance you’ll be eligible to subtract these expenses from your reported income and therefore pay no tax on them.
Here are some basics on the tax code that allows this, plus the types of vehicles that are eligible here.
Section 179 Basics
The relevant tax code here is IRS Section 179, which is written to allow businesses to deduct the full costs of any qualified vehicles that were bought or financed for business reasons during the previous taxable year. These costs will not count against your income, and you will not have to pay taxes on them. Speak to your financing team to confirm whether you qualify here.
Specific Tax Benefits
The general goal of most related tax treatment is to allow the depreciation of the cost of this kind of capital equipment over several years. Companies can use various annual deductions to recover the costs of these kinds of vehicles over time.
Section 179, though, is a special accounting procedure designed for small or medium-sized companies. It allows for specific deductions within a given year, with a maximum write-off of $25,000 in most cases. This write-off maximum is sometimes greater than the company’s overlay in the first year being considered, which can help even further to make the purchase a bit more affordable and sensible.
There’s one hard and fast rule for qualifying for a Section 179 deduction: Vehicles purchased or leased must have a gross vehicle weight rating (GVWR) landing between 6,000 and 14,000 pounds. In addition, the vehicle must be a crossover or SUV type that isn’t normally used by personal drivers on a daily basis. This last bit of language can be a bit open to interpretation, but generally covers all Sprinter vehicles and many other related ones as well. Here’s a basic list of many of the vehicles that generally qualify for a Section 179 tax deduction:
- Sprinter vans
- Mercedes-Benz ML
- Mercedes-Benz GL
- Mercedes-Benz GLE
- Mercedes-Benz GLS
- Mercedes-Benz G-Class
If you’re considering the purchase of Sprinter vans or similar vehicles for any business purpose, you absolutely must look into this deduction. Consult your tax professional if you’re unsure whether your specific purchase will qualify.
For more on this, or to learn about any of our luxury Sprinter vans, speak to the pros at Warner Vans of Utah today.