2025 Business Vehicle Deductions Under the OBBBA

If you are replacing a business vehicle, depreciation and Section 179 are part of the purchase calculation. The rules below address qualifying vehicles placed in service in 2025.

For the purchase to affect 2025, the replacement vehicle must be bought and placed in service on or before December 31, 2025. To satisfy the placed-in-service rule, make sure you both own and drive the vehicle for at least one business mile before year-end.

1. SUVs, crossovers, and vans

If you or your corporation purchases and places in service an SUV or crossover that the manufacturer classifies as a truck with a GVWR of 6,001 pounds or more, you may unlock several depreciation and expensing options.

Example: You place a $50,000 qualifying SUV in service by December 31 and use it 90 percent for business. Your business basis is $45,000, and bonus depreciation may allow a full 2025 write-off if the facts and rules fit.

• 100 percent bonus depreciation, unless you elect out
• Section 179 expensing, subject to limits
• MACRS five-year depreciation
• No luxury auto limits for qualifying heavy vehicles

2. Pickup trucks

Pickups placed in service by year-end can be even more powerful when they clear the gross vehicle weight and cargo-bed rules.

Short-bed pickups may still qualify under SUV rules if they clear the GVWR test but not the bed-length test.

• More than 6,000 pounds GVWR
• Cargo bed at least six feet long and not easily accessible from the passenger compartment
• Placed in service before year-end
• Business use supported by records