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Section 179 Deduction: Business Travel and Vehicle Expenses (2025 IRS Guide)

This guide covers “Section 179 Deduction” within business travel and vehicle expenses. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 463 (2025), Travel, Gift, and Car Expenses, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

If you don’t use the standard mileage rate, you may be able to deduct your actual car expenses.

Actual car expenses include:

If you have fully depreciated a car that you still use in your business, you can continue to claim your other actual car expenses. Continue to keep records, as explained later in chapter 5.

Section 179 Deduction

You can elect to recover all or part of the cost of a car that is qualifying section 179 property, up to a limit, by deducting it in the year you place the property in service. This is the section 179 deduction. If you elect the section 179 deduction, you must reduce your depreciable basis in the car by the amount of the section 179 deduction.

Tip:

There is a limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars, trucks, and vans that may reduce or eliminate any benefit from claiming the section 179 deduction. See Depreciation Limits, later.

You can claim the section 179 deduction only in the year you place the car in service. For this purpose, a car is placed in service when it is ready and available for a specifically assigned use in a trade or business. Even if you aren’t using the property, it is in service when it is ready and available for its specifically assigned use.

A car first used for personal purposes can’t qualify for the deduction in a later year when its use changes to business.

Example.

In 2024, you bought a new car and used it for personal purposes. In 2025, you began to use it for business. Changing its use to business use doesn’t qualify the cost of your car for a section 179 deduction in 2025. However, you can claim a depreciation deduction for the business use of the car starting in 2025. See Depreciation Deduction, later.

More than 50% business use requirement.

You must use the property more than 50% for business to claim any section 179 deduction. If you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. The result is the cost of the property that can qualify for the section 179 deduction.

Example.

You purchased a new car in April 2025 for $24,500 and used it 60% for business. Based on your business usage, the total cost of your car that qualifies for the section 179 deduction is $14,700 ($24,500 cost × 60% (0.60) business use). But see Limit on total section 179, special depreciation allowance, and depreciation deduction, discussed later.

Limits.

There are limits on:

  • The amount of the section 179 deduction;

  • The section 179 deduction for sport utility and certain other vehicles; and

  • The total amount of the section 179 deduction, special depreciation allowance, and depreciation deduction (discussed later) you can claim for a qualified property.

Limit on the amount of the section 179 deduction.

For tax years beginning in 2025, the total amount you can elect to deduct under section 179 can’t be more than $2,500,000.

If the cost of your section 179 property placed in service in tax years beginning in 2025 is over $4,000,000, you must reduce the $2,500,000 dollar limit (but not below zero) by the amount of cost over $4,000,000. If the cost of your section 179 property placed in service during tax years beginning in 2025 is $6,500,000 or more, you can’t take a section 179 deduction.

The total amount you can deduct under section 179 each year after you apply the limits listed above cannot be more than the taxable income from the active conduct of any trade or business during the year.

If you are married and file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service.

If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit. You must allocate the dollar limit (after any reduction) between you.

For more information on the above section 179 deduction limits, see Pub. 946, How To Depreciate Property.

Limit for sport utility and certain other vehicles.

You cannot elect to deduct more than $31,300 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax years beginning in 2025. This rule applies to any four-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways that isn’t subject to any of the passenger automobile limits explained under Depreciation Limits, later, and that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. However, the $31,300 limit doesn’t apply to any vehicle:

  • Designed to have a seating capacity of more than nine persons behind the driver’s seat;

  • Equipped with a cargo area of at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and isn’t readily accessible directly from the passenger compartment; or

  • That has an integral enclosure, fully enclosing the driver compartment and load carrying device, doesn’t have seating rearward of the driver’s seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.

Limit on total section 179 deduction, special depreciation allowance, and depreciation deduction.

The depreciation limitations for passenger automobiles acquired after September 27, 2017, and placed in service during calendar year 2025, for which the Code section 168(k) additional first-year depreciation deduction applies are first tax year, $20,200; second tax year, $19,600; third tax year, $11,800; and each succeeding year, $7,060. See Revenue Procedure 2025-16, Table 1.

The depreciation limitations for passenger automobiles placed in service during calendar year 2025 for which no Code section 168(k) additional first-year depreciation deduction applies are first-tax year, $12,200; second tax year, $19,600; third tax year, $11,800; and each succeeding year, $7,060. See Revenue Procedure 2025-16, Table 2.

The limit is reduced if your business use of the vehicle is less than 100%. See Depreciation Limits, later, for more information.

Cost of car.

For purposes of the section 179 deduction, the cost of the car doesn’t include any amount figured by reference to any other property held by you at any time. For example, if you buy a car as a replacement for a car that was stolen or that was destroyed in a casualty loss, and you use section 1033 to determine the basis in your replacement vehicle, your cost for purposes of the section 179 deduction doesn’t include your adjusted basis in the relinquished car. In that case, your cost includes only the cash you paid.

Basis of car for depreciation.

The amount of the section 179 deduction reduces your basis in your car. If you choose the section 179 deduction, you must subtract the amount of the deduction from the cost of your car. The resulting amount is the basis in your car you use to figure your depreciation deduction.

When to elect.

If you want to take the section 179 deduction, you must make the election in the tax year you place the car in service for business or work.

How to elect.

Employees use Form 2106, Employee Business Expenses, to make the election and report the section 179 deduction. All others use Form 4562, Depreciation and Amortization, to make an election.

Caution:

Form 2106 is only used by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. Due to the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a), employees who don’t fit into one of the listed categories may not use Form 2106.

File the appropriate form with either of the following.

  • Your original tax return filed for the year the property was placed in service (whether or not you file it timely).

  • An amended return filed within the time prescribed by law. An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. The amended return must also include any resulting adjustments to taxable income.

Caution:

You must keep records that show the specific identification of each piece of qualifying section 179 property. These records must show how you acquired the property, the person you acquired it from, and when you placed it in service.

Revoking an election.

An election (or any specification made in the election) to take a section 179 deduction for 2025 can only be revoked with the Commissioner’s approval.

Recapture of section 179 deduction.

To be eligible to claim the section 179 deduction, you must use your car more than 50% for business or work in the year you acquired it. If your business use of the car is 50% or less in a later tax year during the recovery period, you have to recapture (include in income) in that later year any excess depreciation. Any section 179 deduction claimed on the car is included in figuring the excess depreciation. For information on this calculation, see Excess depreciation, later in this chapter under Car Used 50% or Less for Business. For more information on recapture of a section 179 deduction, see Pub. 946.

Dispositions.

If you dispose of a car on which you had claimed the section 179 deduction, the amount of that deduction is treated as a depreciation deduction for recapture purposes. You treat any gain on the disposition of the property as ordinary income up to the amount of the section 179 deduction and any allowable depreciation (unless you establish the amount actually allowed). For information on the disposition of a car, see Disposition of a Car, later. For more information on recapture of a section 179 deduction, see Pub. 946.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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