Members who purchased or plan to purchase a new work vehicle in 2016 using the $500 cash allowance from FCA US LLC, may benefit from Section 179, regardless of deduction limits.
In just the first three-quarters of 2016, members bought 71 vehicles using the $500 cash allowance though the Society of American Florists Vehicle Discount program with FCA US LLC. Those members with new work vehicles could save more money at tax time.
Section 179 of the U.S. tax code lets taxpayers deduct the full cost (within limits) of certain types of property from their federal taxes for the year the property was purchased and put into service. Previously in a state of flux from tax year to tax year, the U.S. House and Senate last December approved a bill to permanently raise the Section 179 deduction limit to $500,000 on “qualifying equipment,” which is defined by the IRS as machinery, computers, office furniture, software, etc.
While many people can and do apply the Section 179 deduction to vehicles purchased for business reasons, small-business owners should keep in mind that there may be restrictions in place for this type of purchase. To put it simply, whereas vehicles unlikely to be used for personal use – vehicles with a fully-enclosed driver’s compartment/cargo area, for example – qualify for the full $500,000 deduction, passenger vehicles are subject to certain deduction limits, even if they are used for work more than 50 percent of the time. Similarly, SUVs, trucks and vans that do not meet specific IRS guidelines are also subject to limitations.
Members who purchased or plan to purchase a new work vehicle in 2016 using the FCA US LLC perk, may benefit from Section 179, regardless of deduction limits. Consult this worksheet to see the estimated Section 179 expense allowances for Chrysler, Dodge, Jeep®, Ram and FIAT® brand vehicles.
SAF’s Vehicle Discount program with FCA is a $500 cash allowance on the purchase or lease of most Chrysler, Dodge, FIAT®, Jeep® and Ram® models. The $500 discount is off the final negotiated price of the vehicle and, in most cases, can be combined with other offers to increase savings. In addition, SAF member business owners and their employees also may qualify for On The Job program allowances, including up to $1,000 to add new equipment, a company logo or graphic to their work vehicle. Get details at safnow.org/fca.
For information about SAF’s discount programs and services, visit safnow.org/business-service-discounts.
