Qualifying Home Office Deduction + Vehicle Deductions

February 7th, 2025 at 2:44 PM

If you are considering purchasing a business vehicle, you may be eligible for significant tax deductions, especially when combined with a qualifying home office. Here’s how:

Heavy Vehicle Deductions

In 2025, businesses can take advantage of:

• Section 179 expensing – Deduct up to $1,250,000 of qualifying business equipment, including heavy vehicles. SUVs are subject to a $31,300 limit, while pickups and vans meeting specific criteria are not.
• Bonus depreciation – Claim 40 percent first-year depreciation on a qualifying heavy vehicle.
• Business-use requirement – You must use the vehicle more than 50 percent for business to qualify for these deductions.

A “heavy” vehicle has a gross vehicle weight rating (GVWR) of over 6,000 pounds. Certain SUVs, pickups, and vans qualify, but lighter vehicles are subject to much lower annual depreciation limits.

Home-Office Deductions

A deductible home office that meets the principal place of business test converts commuting miles into business miles, making it easier to meet the more than 50 percent business-use test.

For your home office to qualify as your tax code–defined principal office, you must use it regularly and exclusively for your business, and the home office must serve as

• your primary income-generating space, or
• the location where you perform substantially all your administrative tasks.

Example of Tax Savings

A $90,000 heavy SUV used 100 percent for business could generate $61,824 in first-year deductions, while with a qualifying pickup truck, you could deduct the entire $90,000 in Year One under Section 179.

For Corporate Owners

If you own the vehicle personally, but operate as a corporation, ensure your corporation reimburses you for business use to capture the full tax benefit.

Mark S. Fineberg, CPA