Under the 2017 IRS Tax Cuts and Jobs Act, small businesses investing in new equipment, including eligible vehicles, can deduct the full purchase cost on their 2020 tax returns.

Traditionally, these deductions are spread over multiple years, but now many small businesses can write off the entire cost of qualifying new Ford trucks or vans in one year. There is no cap on the amount you can claim.

To qualify, vehicles must be bought and put into service between January 1, 2020, and December 31, 2020. They must be used at least 50% for business purposes within the first year. If the vehicle is used for both personal and business, the deductible amount is proportional to the business use.

For the 2023 tax year, ensure the vehicle is purchased and in service by December 31, 2023.

Important Note: This information is provided by your local Ford Dealer and should not be considered tax advice. Tax situations vary and rules may change. For details on Section 168 (K) expensing or other business vehicle deductions, consult your tax professional and visit the IRS website at www.irs.gov.

According to Bonus Depreciation in Section 168 (K) of the Internal Revenue Code, businesses may fully deduct the cost of trucks, vans, and SUVs over 6,000 lbs. GVWR when used for business. Passenger vehicles under 6,000 lbs. GVWR are limited to $18,100 depreciation in the purchase year, with normal MACRS depreciation applied to the remaining basis. Vehicles classified as "qualified non-personal use vehicles" are exempt from these limits. For specific vehicle qualifications and tax treatments, refer to IRC Section 280 (d)(7), Income Tax Reg. Sec 1.280F-6(c)(3)(iii), Income Tax Reg. Sec 1.274-5T(k), Revenue Ruling 86-97, and consult your tax advisor.

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