Estimated read time: 4-5 minutes
"You have to spend money to make money" is an established business principle. Unfortunately, the adage doesn't offer any advice on how to effectively manage expenditures.
Business leaders and owners alike are tasked with assessing what to invest in and when. For many, this task proves especially difficult when acquiring company vehicles.
Whether a business is in need of just any truck or a specific body type, machines can take a toll on a budget. That said, there are ways to lower costs, especially during tax season.
"Like with any vehicle purchase, there are ways to make sure you're getting the best deal," said Sam Johnson, fleet director for Young Commercial. "Our fleet team at the Young Automotive Group constantly tracks which benefits are available to help customers find options that fit their needs. There's a lot available right now for businesses to take advantage of."
Currently, several manufacturers are opening order banks and allowing buyers to purchase the business vehicles they've designed for 2026. Before you make a decision, here are four noteworthy tax benefits to make things easier on the books:
100% bonus depreciation for business vehicles
A benefit established with the recent passing of the "One Big Beautiful Bill," qualifying new and used business vehicles are now eligible for a 100% bonus depreciation. Available until 2029, this allows owners to write off a machine's full cost the year it's placed in service, according to an article for Albin, Randall & Bennett.
"This is a game changer for several entrepreneurs, especially those running start ups," Johnson said. "If you're a smaller operation, and just need a utility vehicle, this can really give you a jumpstart on your operation."
To qualify, units must have a gross vehicle weight rating of 6,000 lbs. While this will apply to business vehicles, fleet, commercial-use, lease and salvage title machines will not be eligible for the benefit.
Pass-through deductions
Also known as a Section 199A deduction, business owners with operations such as S Corporations are eligible to deduct 20% of their qualified business income for tax years beginning after Dec. 31, 2017.
Though this benefit doesn't specifically relate to purchasing vehicles, it does provide companies with an ability to open funds for units. According to information from the Internal Revenue Service, the deduction factors in the "net amount of qualified items of income, gain, deduction, and loss from any qualified trade or business."
Additionally, owners can apply the same benefit to income from real estate investment trusts and qualified publicly traded partnerships they own.
Enhanced business interest deduction
While the bonus depreciation benefit only applies to business vehicles, Section 163(j) of the "One Big Beautiful Bill" offers fleet buyers something noteworthy — specifically regarding inflation.
According to an article for accounting firm Schneider Downs, one of the tax changes reverts to an "earnings before interest, taxes, depreciation and amortization" calculation — increasing a business' amount of deductible interest.
"What makes this convenient is that owners can calculate their deductions before subtracting things like depreciation," Johnson said. "Interest and inflation rates feel like they're constantly changing, so being able to write off more of these costs adds a lot of stability to a business owner's situation."
Higher deduction capabilities through Section 179
Investing in equipment can quickly take a toll on a business. That said, recent policy changes have lessened the impact incurred by these expenses.
Today, business owners are able to deduct up to $2.5 million worth of equipment the year that they buy it, with phaseouts starting at $4 million. The article by Albin, Randall & Bennett. states Section 179 of the "One Big Beautiful Bill," the benefit may apply to items such as heavy SUVs used more than 50% for business as well as trucks and vans with a separate area that is not accessible from a passenger area. Restrictions may apply however to SUVs with a gross vehicle weight rating of 6,000 lbs., but less than 14,000 lbs.
How Young Commercial can help your business
One of the nation's most renowned fleet vehicle operations, the Young Automotive Group offers a wide array of units and is capable of fitting machines for industries such as construction, transportation, business, waste management and law enforcement. Shipping anywhere across the United States, their team is capable of overseeing all parts and servicing needs, and can work with a variety of lenders.
"We've loved seeing our growth as a company over the last several years," said Johnson. "We started out with just a few clients and were able to find ways to deliver the exceptional to any organization. We're dedicated to delivering value, and that commitment has helped us retain customers throughout our operations tenure."
Visit youngcommercial.com to explore their inventory.
Material featured in this article is meant for informational purposes, and is not to be construed as tax, investment or legal advice. Consult with a tax professional before making tax and purchasing decisions.
