I have a question about farm deductions. Last year I purchased a vehicle for my agricultural business and I would like to take the full deduction this year rather than depreciating it? Is that allowed?
The maximum Section 179 expense deduction is $2,500,000. It’s reduced dollar-for-dollar for qualified expenditures more than $2 million.
The Section 179 deduction is limited to:
- The amount of taxable income from an active trade or business
- $25,000 for SUVs and other vehicles rated at more than 6,000 pounds but not more than 14,000 pounds
The $25,000 limit doesn’t apply if your vehicle is:
- Designed for more than nine passengers behind the driver’s seat
- Equipped with a cargo area of at least six feet in interior length that’s not readily accessible from the passenger compartment
- A vehicle that:
- Has an integral enclosure fully enclosing the driver compartment and load-carrying device
- Doesn’t have seating rearward of the driver’s seat
- Has no body section protruding more than 30 inches ahead of the leading edge of the windshield
You can carry over costs for an unlimited number of years that:
- You expense using the Section 179 deduction
- Are limited due to the business income limitations
Vehicle expenses have a separate limitation for the maximum amount of depreciation you can take. The limitation is based on these factors:
- If the vehicle is a car, truck, or a van
- If it’s an electric vehicle
- If you have chosen to take special or bonus depreciation
- If the vehicle is bought or leased
You can carry over any amounts over the maximum that you can’t claim in 2018.
Learn how to deduct student loan interest with H&R Block. Get information about qualified education expenses and see if a student loan tax deduction applies to you.
What does it mean to be an enrolled agent? Learn more about the roles and requirements of enrolled agent (EA) tax preparers at H&R Block.
Tax preparers can have various designation and specialties. Learn how different types of tax preparers at H&R Block can help you in person or virtually.
What’s the difference between an enrolled agent (EA) vs. a certified public accountant (CPA)? Explore the roles of EAs and CPAs at H&R Block.