Ford-IRS Tax Savings

Trucks with a GVWR greater than 6,000 lbs. and a bed length of at least six feet (i.e., Ford F-150/F-250/F-350) qualify for the maximum first-year depreciation deduction of up to the full purchase price. SUVs, including trucks, with a bed length of less than six feet and a GVWR greater than 6,000 lbs. (i.e., Ford F-150, SuperCrews, 5½ ft. bed, Explorer, Expedition) qualify for the maximum first-year depreciation deduction of up to the first $25,000 of the full purchase price, plus 60% depreciation of any remaining balance.

Details, Details¹^,²

The qualifying vehicle must be purchased and placed into service between January 1, 2017, and December 31, 2017. It must be used at least 50% for business, based on mileage, in the first year it is placed in service. So if you choose to use it for both personal and business use, the cost eligible for the deduction would be the percentage used for business. Please note that all businesses that purchase and/or finance less than $2 million in business equipment during tax year 2017 should qualify for the Section 179 deduction.

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Note: The information supplied here is provided by your local Ford store as a public service to its customers. It should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability. Individual tax situations may vary. Federal rules and tax guidelines are subject to change. For more information about the Section 179 expense write off or other business vehicle expense write offs, you should consult your tax advisor for complete rules applicable to your transaction and visit the Internal Revenue web site at www.irs.gov.

¹This analysis applies only to vehicles placed in service in the United States after December 31, 2015 and by December 31, 2017 with no written binding contract for acquisition in effect before January 1, 2017. The aggregate deduction of $500,00 under Internal Revenue Code Section 179 is most beneficial to small businesses that place in service less than $2,000,000 of "Section 179 property" during the year (vehicles and other business property).

²IRC Section 280F(d)(7)(B) requires that the limitation under IRC Section 280F(a)(1) be adjusted annually, based on the CPI automobile component for October of the preceding year. The IRS officially announced the Section 280F depreciation limits in Revenue Procedure 2017-23. The passenger automobile limitation is $11,160, the trucks/vans under 6,000 lbs. limitation is $11,160. SUV's over 6,000 lbs. GVWR are limited to a deduction of $25,000 under Section 179(b)(5) with the remaining basis in the vehicle depreciated under normal MACRS methods. The expensing restrictions under Section 280F do not apply to vehicles that are considered to be "qualified non-personal use vehicles" (QNUVs). A UNUV is generally a vehicle that, by virture of its nature or design, is not likely to be used more than a de minimis amount for personal purposes. For more information, see Income Tax Reg., Sec. 1.280F-6(c)(3)(iii), Income Tax Reg. Sec. 1.274-5T(k), and Revenue Ruling 86-97, and contact your tax advisor for details. Consult your tax advisor as to the proper tax treatment of all business-vehicle purchases.