Expand Your Fleet ASAP to Maximize Owner-Operator Tax Deductions

Want to expand your fleet heading into 2018? Leveraging the Section 179 deduction for your commercial vehicle lease is the most profitable last-minute decision you can make.

This tax-relief legislation targets small and mid-size businesses. Thousands of businesses have successfully taken advantage of this break to grow their operations.

Don’t be the business owner that misses out! Equipment and software must be financed and road-ready by Dec. 31 to qualify for tax year 2017.

What’s Section 179, and How Can It Expand Your Fleet?

Section 179 is a U.S. government incentive meant to encourage businesses to invest in themselves.

Almost all types of "business equipment" your company finances qualifies for Section 179. But let’s focus on how you can grow your vehicle fleet -- your trucks are the lifeblood of your operation!

Instead of waiting several years to gradually deduct that truck you leased, you can accelerate the depreciation to get most or all of the break in 2017. This lump savings gives you the head start you need to expand your fleet.

Why is this great for lease financing?

Section 179 is great for buying vehicles for your fleet -- especially if you use lease financing. Whether the equipment is new or used, your company can reap the benefits.

The amount you deduct will almost always exceed your 2017 spending when you combine a properly structured equipment lease with a full Section 179 deduction. Since the deduction is based on weight, most categories of commercial vehicles are eligible, including:

• Tractor-trailers
• Tow trucks
• Dump trucks
• Much more

Have a smaller commercial vehicle? Worried about whether it qualifies? Here’s a list of eligible vehicles for tax year 2017.

The amount you save in taxes can actually exceed your yearly vehicle payments, making this a very productive decision for your business. (Yes, you are reading this correctly: In many cases, the deduction will become a profit).

Best of all, you get the new equipment (or perhaps software like telematics) that can take your business to new heights!

Section 179 Strategies

Have a strategy in place when you decide to use Section 179. A quick bit of planning will help you get the most out of this rare opportunity.

Things to consider:

• You only use Section 179 on a vehicle you use commercially more than 50% of the time. The more you use it for business beyond that 50%, the more money you can save. Think ahead about how extensively you can use your potential purchase toward your business goals.
  
  
• Your vehicle must be active. It’s not bringing in revenue if it’s sitting in your parking lot anyway, right?
  
  
• Your business must be generating revenue. If you’re just getting your fleet off the ground, this deduction may not be right for you yet.

You can ask a tax adviser to further explain how the rule specifically applies to your potential purchases. If you’ve got a good relationship with a lease financing partner, it’ll also be able to help.

Don’t Hesitate -- Depreciate!

Section 179 can change each year without notice -- even mid-year. You’re only hurting your company’s chances for growth if you fail to leverage this tax code while it's available.

We aren’t crying wolf about acting now: Starting in 2018, the depreciation rate will decrease to 40 percent. In 2019, it will drop to 30%.

Have we suddenly inspired you to find a commercial vehicle at the 11th hour, but you don’t know what to look for? Here are some questions to ask when picking a used commercial truck.