Why Gross Vehicle Weight Matters For Depreciation Purposes

For the 2017 tax year the Federal Section 179 depreciation deduction limit is now at $500,000, it is easy to think that any fixed asset classified as personal property can now be expensed.  However, in the year of purchase, it is important to remember the depreciation limits on passenger automobiles and trucks. 

A passenger automobile is any four-wheeled vehicle for primary use on public streets, roads and highways with an unloaded gross vehicle weight of 6,000 pounds or less.  The maximum first year depreciation that can be taken on these vehicles is $11,160.  Trucks with a gross vehicle weight greater than 6,000 pounds and with an interior bed length under 6 ft. are not subject to any passenger automobile limits, however, the annual Section 179 deduction is limited to $25,000 per vehicle.  Trucks with both a gross vehicle weight greater than 6,000 pounds and a bed length of 6 ft. or more are not subject to the $25,000 section 179 limit, but only to the annual limit for Section 179.  The annual limit for Section 179 until further notice is $500,000 for federal tax returns and $25,000 for Iowa.