Can I Write Off My Business Vehicle or Equipment This Year? Depreciation Basics

How bonus depreciation, Section 179 and regular depreciation work for a car, a truck or equipment bought for a business in 2025 and 2026. Updated October 14, 2026.

When a business buys something that lasts more than a year (a van, a food truck, an oven, a computer), it usually can't deduct the price right away like rent or supplies. The cost is recovered through depreciation: a deduction spread over the asset's recovery period. The law also lets you speed this up, often all the way to deducting the whole cost in the first year. This guide explains the choices, who is allowed to take the deduction, how to find the right category, and when it pays to slow down. It is based only on official IRS sources.

Want to see the numbers? Our free Depreciation Calculator shows your asset's category and compares bonus depreciation, Section 179 and regular depreciation year by year.

Three Ways to Write Off an Asset

Method	First year	Good to know
Bonus depreciation (the IRS calls it the special depreciation allowance)	100% of the cost for property acquired after January 19, 2025	Automatic unless you elect out. Works for new and used property (used: not bought from a close family member or a company you control). Can create a loss.
Section 179	Any dollar amount you choose, up to the limit	You have to elect it. It can't be more than your business income (for individuals, wages count too); the unused part carries forward. Needs more than 50% business use.
Regular depreciation (MACRS)	For 5-year property, 20% of the cost (10% with straight line)	What you get after electing out of bonus. The rest is spread over the next 5 years for 5-year property, 7 years for 7-year property. You can also choose straight line or the even slower ADS.

The order is fixed: first Section 179 (if you elect it), then bonus depreciation on what is left, then regular depreciation on the rest.

The Numbers for 2025 and 2026

	2025	2026
Bonus depreciation: property acquired after January 19, 2025	100%	100%
Bonus depreciation: property acquired before January 20, 2025	40%	20%
Section 179 maximum	$2,500,000	$2,560,000
Section 179 shrinks when the year's purchases exceed	$4,000,000	$4,090,000
Section 179 cap for a heavy SUV (6,001–14,000 lb)	$31,300	$32,000
Passenger car (6,000 lb or less): first-year cap with bonus / without	$20,200 / $12,200	$20,300 / $12,300
Passenger car cap: 2nd year / 3rd year / each later year	$19,600 / $11,800 / $7,060	$19,800 / $11,900 / $7,160

What changed: the One Big Beautiful Bill Act (Public Law 119-21, July 4, 2025) made 100% bonus depreciation permanent for property acquired after January 19, 2025. If you signed a binding purchase contract, the property counts as acquired on the contract date, not on the delivery date. For the first tax year ending after that date (2025 for most businesses), you could choose 40% instead of 100%.

Who Can Depreciate It: the Business or You?

Only the owner of property can depreciate it, and only while it is used in a business or to earn income. Who the owner is depends on the type of business.

Single-member LLC (taxed as a sole proprietorship)

For income tax, a single-member LLC and its owner are one taxpayer, and the business is reported on Schedule C. So it doesn't matter whether the van is titled to the LLC or to you personally: you depreciate it on Schedule C as long as you use it in the business.
If you also use it personally, only the business share counts (for a vehicle: business miles ÷ total miles). Driving between home and your regular workplace is commuting, not business use.
Something you already owned, for example your personal car that you start using for deliveries: it is placed in service on the day you start using it in the business, and depreciation is figured on the smaller of what you paid or its market value on that day. Section 179 is not available for it, because it wasn't bought for the business. Bonus depreciation can still apply; the rate depends on when you originally bought it.

S corporation, C corporation or multi-member LLC

The company is a separate taxpayer and can depreciate only what it owns. If you buy a truck in your own name and let your S corporation use it, the company has nothing to depreciate. And as an employee of your own company, you can't deduct work expenses the company doesn't reimburse on your personal return.
The clean way: buy it in the company's name, with the company's money or a loan in the company's name.
Already in your name? Your options:
1. Reimbursement under an accountable plan. The company pays you for the business use (for a car, usually at the IRS standard mileage rate, 70 cents a mile for 2025) based on your mileage log. It is tax-free to you and deductible for the company.
2. Transfer it to the company (sell or contribute). The company then gets only regular depreciation, with no bonus and no Section 179, because the asset comes from a related party or with your carried-over cost.
3. Rent it to the company at a fair price. You report the rent and your own depreciation on your return. A car that you drive yourself as an owner of more than 5% then has to use the slow ADS straight-line method.
In a partnership, a partner can deduct expenses paid for the partnership only if the partnership agreement requires the partner to pay them.
S corporation specifics: bonus and regular depreciation reduce the S corp's income. Section 179 is not deducted by the corporation: it passes to the shareholders on Schedule K-1, and the income limit applies to the S corp and again to each shareholder. A shareholder can deduct S corp losses only up to his or her stock and debt basis.

Choosing the Category (Recovery Period)

The IRS assigns each asset a class life in a table in Publication 946 (Appendix B). The class depends on what the asset is, and sometimes on the kind of business it is used in. The class sets the recovery period under the regular system (GDS) and under the slower alternative system (ADS).

Asset	Recovery period (GDS)	ADS
Cars, light trucks and vans	5 years	5 years
Heavy trucks (13,000 lb or more, unloaded)	5 years	6 years
Trailers, including food and concession trailers	5 years	6 years
Semi-truck tractor units	3 years	4 years
Computers and printers	5 years	5 years
Restaurant, store and service-business equipment	5 years	9 years
Construction contractor equipment	5 years	6 years
Office furniture, fixtures, safes	7 years	10 years
Equipment that isn't listed anywhere in the IRS table	7 years	12 years
Interior improvements to a commercial building	15 years	20 years

"My food truck doesn't go anywhere. Is it still a vehicle?"

Yes, and it doesn't matter. Depreciation follows what the asset is and how long it has been in service, not how many miles it drives. A food truck is a truck: asset class 00.241 if it weighs under 13,000 lb unloaded, 00.242 if heavier. Either way it is 5-year property. Even if you look at the kitchen inside it as restaurant equipment (class 57.0), that is 5-year property too. So the answer is the same: 5 years.
A truck that has been specially built for the business (built-in kitchen, permanent equipment, the business name painted on) is what the IRS calls a qualified nonpersonal use vehicle. It is not "listed property": the car depreciation caps and the SUV cap don't apply, and the more-than-50% business use test for vehicles doesn't apply either.
Depreciation starts when the truck is ready and available for its job, even if you haven't sold a single taco yet. That isn't the day you paid for it: the IRS looks at the whole picture, such as whether the equipment is installed and working and whether you have the permits you need to legally start selling. Bought in March, but the kitchen was finished and the health permit issued only in June? The truck was most likely placed in service in June. If you used it for the business earlier (events, catering under a temporary permit), the date can be earlier. A truck that sits idle during a slow season keeps depreciating.
If the truck is taken off its wheels and permanently attached to the ground, the answer can change. Talk to your tax professional first.

Cars, SUVs and Pickups: Special Rules

Passenger cars, SUVs, pickups and vans rated 6,000 lb or less have yearly depreciation caps (see the table above), multiplied by the business-use percentage. With 100% bonus, an IRS safe harbor lets you depreciate the cost above the first-year cap in years 2–6. Whatever is still left after that is deducted at $7,060 a year (2025 cars) or $7,160 a year (2026 cars).
Vehicles over 6,000 lb (heavy SUVs, full-size pickups and vans) have no yearly caps: with bonus depreciation you can write off 100% in the first year. Only Section 179 is limited, to $31,300 / $32,000 for SUVs. The SUV cap doesn't apply to a pickup with a cargo bed at least 6 feet long that can't be reached from the cab, a cargo van with no seats behind the driver and no hood sticking out more than 30 inches in front of the windshield, or a vehicle that seats more than 9 passengers behind the driver.
For most vehicles, bonus and Section 179 require more than 50% business use. If business use later drops to 50% or less, the extra depreciation is added back to income. Keep a mileage log.
Standard mileage rate or actual expenses? If you take bonus, Section 179 or regular depreciation on a car, you can't switch that car to the standard mileage rate later. To use the standard rate, you must choose it in the first year you use the car in the business.

When Bonus Depreciation Is Not a Good Idea, and How to Elect Out

Bonus depreciation happens automatically. For a new business with little or no income, writing off everything in year 1 can waste much of the benefit:

Sole proprietor: a loss first offsets your other income on the same return (for example, your spouse's wages), and that part is useful. What is left becomes a net operating loss: it can only be carried forward, and in a later year it can offset at most 80% of taxable income.
A carried-forward loss doesn't reduce self-employment tax. Depreciation taken in a profitable year cuts both income tax and the 15.3% self-employment tax.
Tax brackets: a deduction is worth more in a year when your income is taxed at 22–24% than in a year at 10–12% or zero.
S corporation: the loss passes to you but can be used only up to your basis; the rest waits. C corporation: the loss becomes a net operating loss of the corporation.

How to elect out:

Attach a statement to the tax return saying that you elect not to claim the special depreciation allowance for a class of property, for example "all 5-year property".
It covers every asset in that class placed in service that year: if you elect out for 5-year property because of the food truck, the new computers and kitchen equipment (also 5-year) lose bonus too.
Make it on the return filed on time, including extensions. If you filed on time without it, you can still make it on an amended return within 6 months of the original due date.
Once made, it can't be revoked without IRS consent.
The owner makes it: you on your Form 1040, or the S corporation, partnership or C corporation on its own return.

Other ways to slow down or fine-tune the write-off:

Section 179 for an exact amount. You choose the dollar amount, item by item. It can't be more than your business income for the year (wages count for individuals), and the unused part carries forward to the next year, where it is deducted against business income.
Straight line, 150% declining balance or ADS instead of regular depreciation. These spread the cost more evenly or over a longer period. Like the election out, each covers the whole class for that year and can't be changed later.
2025 only: a one-time election to take 40% bonus instead of 100%.

Small Purchases: Just Deduct Them

Items costing up to $2,500 per item or invoice (up to $5,000 for businesses with audited financial statements) can be deducted as a regular expense under the de minimis safe harbor instead of being depreciated. You elect it with a statement attached to the return each year, and you must treat the purchases the same way in your books.

When You Sell

Depreciation lowers the asset's tax basis. When you sell, the gain up to the depreciation you took (including bonus and Section 179) is taxed as ordinary income. This is called depreciation recapture. Writing off 100% in year 1 doesn't make the tax disappear; it moves it, and selling the truck later brings part of it back.

What to Bring to Your Tax Preparer

The bill of sale or invoice, including sales tax, delivery and installation.
The title or registration: whose name is on it.
The date of purchase or binding contract, and the date the asset was ready for use (installation finished, permits received).
Loan documents, if it was financed.
A mileage log for any vehicle.
For something you owned before: what you paid and what it was worth when you started using it in the business.
A list of everything else bought for the business that year, with dates. Some rules look at all of the year's purchases together, and an election out covers the whole class.

Try Our Calculator

Our free Depreciation Calculator shows the IRS category of your vehicle or equipment and compares 100% bonus, Section 179, regular MACRS, straight line and ADS year by year for a sole proprietor, an S corporation, a C corporation or a partnership. Add your expected profit to see whether the write-off would create a loss.

Bottom Line

For property bought after January 19, 2025, the default is to write off 100% in the first year. That is great for a profitable business, but not always for a new one. Make sure the asset is owned by the taxpayer who will deduct it (for an S corp or C corp, by the company), find its category by what it is rather than how much it moves, and decide on electing out before the return is filed, because the election usually can't be undone.

This article is general information, not tax advice for your specific situation.