Section 179 Deduction for Cleaning Company

General
1

My wife and I run a rapidly expanding cleaning company, and we’re exploring the purchase of 1-3 business vehicles next year. We’re considering SUVs like a Toyota 4Runner because of their reliability and suitability for our area’s tough roads (WV). Here’s our situation:

  1. We’d prefer to buy used vehicles and pay cash if possible. Ideally, the purchase price would be under $30K.
  2. These vehicles would be used 100% for business purposes.
  3. Currently, we’re using my wife’s personal vehicle for business (with mileage log) and claiming the standard mileage deduction. We’re wondering if there’s a way to sell her vehicle to our LLC and still benefit from Section 179.
  4. If transferring the personal vehicle isn’t beneficial, we’d purchase a separate business vehicle and get a personal vehicle for her use.

Questions:

  • Can we deduct the full purchase price of a used SUV (e.g., a $25K 4Runner) under Section 179?
  • Does transferring the personal vehicle to the LLC offer any tax benefits?
  • Are there specific mileage, year, or price requirements for Section 179 on used vehicles?

We’ll consult a CPA before making any moves, but we’d like to know if this plan is viable.

2

Just a reminder: If you depreciate a vehicle (e.g., via Section 179), you can’t claim mileage costs anymore—only actual operating costs like gas and maintenance.

3

Flynt said:
Just a reminder: If you depreciate a vehicle (e.g., via Section 179), you can’t claim mileage costs anymore—only actual operating costs like gas and maintenance.

Understood. We’re fine with claiming actual expenses if we can deduct the full purchase price of a business vehicle. The goal is to fully separate personal and business vehicle use.

4

Yes, a 4Runner qualifies for Section 179 if its gross vehicle weight (GVW) exceeds 6,000 lbs. For 2025, you could deduct up to $31,300 under Section 179, then take 40% bonus depreciation on the remainder. If the purchase price is $25K, you’d likely deduct the full amount.

5

@Sky
Great! We’re looking at used vehicles around $25K. Does Section 179 apply fully to used vehicles?

6

Isle said:
@Sky
Great! We’re looking at used vehicles around $25K. Does Section 179 apply fully to used vehicles?

Yes, as long as it’s over 6,000 lbs GVW and used 100% for business. No additional requirements regarding mileage, year, or price apply.

7

If you transfer your wife’s personal vehicle to the LLC, you wouldn’t get the Section 179 benefit. The company must purchase the vehicle from a third party to qualify. For the transferred vehicle, you could start claiming depreciation on any remaining value after calculating straight-line depreciation from its original purchase date.

8

@Flynt
Thanks for clarifying. It sounds like buying a new-to-us vehicle for the business is the better option.

9

If you’re paying $25K for a used 4Runner and it’s solely for business use, you can deduct the full amount under Section 179 in 2025. Just ensure the GVW is above 6,000 lbs.

10

Sky said:
If you’re paying $25K for a used 4Runner and it’s solely for business use, you can deduct the full amount under Section 179 in 2025. Just ensure the GVW is above 6,000 lbs.

Understood! Thanks for confirming. We’ll double-check the GVW before purchasing.