OBBBA 2025: Maximize Your Business Vehicle Deduction Before Year-End

The 2025 Advantage

Under the One Big Beautiful Bill Act (OBBBA), business owners can deduct up to 100 percent of qualifying vehicle costs if the vehicle is both owned and placed in service by December 31 2025. Placed in service means the vehicle is available for business use and driven at least once for work before year-end. Keep purchase and delivery records to prove timing.

Eligible Vehicle Types

Heavy SUVs and Crossovers
GVWR must exceed 6,000 lbs but be under 14,000 lbs. You may claim either
• 100 percent bonus depreciation, or
• up to 31,300 under Section 179 for 2025.
Vehicles used more than 50 percent for business qualify. Record the business percentage in your mileage log.

Pickup Trucks
Pickups with beds at least six feet long and GVWR over 6,000 lbs qualify for full Section 179 expensing (up to 2.5 million overall).
Short-bed pickups that fail the six-foot rule are treated as SUVs and fall under the 31,300 cap.

Cargo and Passenger Vans
Cargo vans must have no rear seats and a solid divider behind the driver.
Passenger vans qualify if GVWR is over 6,000 lbs and they seat nine or more behind the driver.
These meet the requirements for 100 percent bonus depreciation or Section 179 expensing.

Passenger Cars and Light Vehicles
Vehicles 6,000 lbs GVWR or less fall under luxury auto limits. 2025 caps allow about 20,200 in the first year (12,200 plus 8,000 bonus). Depreciation continues over five years with lower annual limits. Section 179 is limited to those same caps.

Electric Vehicles
EV credits ended September 30 2025. Conventional heavy vehicles now offer the primary path to major 2025 deductions.

Example

A business buys a 50,000 SUV on December 15 2025 and uses it 90 percent for business. The business cost is 45,000. Because the SUV has a GVWR over 6,000 lbs and was placed in service before year-end, the taxpayer can deduct the full 45,000 using bonus depreciation or a mix of Section 179 and MACRS.

Documentation Checklist

☑ Proof of ownership and delivery before December 31
☑ Mileage log showing over 50 percent business use
☑ Door-frame label photo for GVWR verification
☑ Purchase contract and payment records
☑ Appraisal or manufacturer specs if needed for classification

Common Pitfalls to Avoid

• Assuming an order date qualifies without delivery or use.
• Failing the 50 percent business-use test.
• Exceeding the SUV 31,300 limit under Section 179.
• Skipping mileage logs or reconstructing them after year-end.

Quick Recap

  1. Buy and place the vehicle in service by December 31 2025.

  2. Confirm GVWR over 6,000 lbs for larger deductions.

  3. Use Section 179 up to limits, then apply bonus depreciation.

  4. Keep all records and logs to support your claim.

In 2025, OBBBA allows 100 percent bonus depreciation for qualifying business vehicles placed in service by December 31. Heavy SUVs, pickups, and vans over 6,000 lbs can produce full first-year deductions with proper documentation.

Schedule a 20-minute consultation to model your vehicle purchase and maximize deductions before December 31.