2018 IRC Section 179 Expensing Limitations

 

The tax law that was passed by Congress and signed into law by President Trump on December 22, 2017 called the Tax Cuts and Jobs Act (H.R. 1) made changes to the Section 179. Below is the UPDATED information.

For tax year 2018, the MAXIMUM allowable expensing for certain "qualifying business property" under Internal Revenue Code (IRC) Section 179 is $1,000,000. This amount begins to phase-out when IRC Section 179 property exceeds $2,500,000.

Caution!

The IRC Section 179 limitation imposed on sport utility vehicles (SUV's) has an expense limit of $25,000 for tax year 2018 ! See definition of an SUV below.


Definition of an Sport Utility Vehicle (SUV)

An SUV is defined as a four-wheeled vehicle with a gross vehicle weight rating (GVWR) of more than 6,000 pounds but not more than 14,000 pounds. Consequently, in addition to SUVs, an SUV may include heavy pickup trucks, vans, and small buses.

However, the term “SUV” does NOT include any of the following vehicles:

  • A vehicle designed to have a seating capacity of more than nine persons behind the driver’s seat,

  • A vehicle equipped with a cargo area of at least six feet in interior length which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or

  • A vehicle with an integral enclosure, fully enclosing the driver compartment and load carrying device, does not 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.