Understanding Section 168 When Buying GMC Trucks

If your company uses GMC truck models for daily business, you might be eligible for the Section 168 tax deduction. As long as your trucks were used in the last calendar year, you could expense more than half of the cost of each model. Here’s everything you need to know about taking advantage of this deduction from your friends at Matt Nimey GMC.

What is Section 168 Tax Deduction?

Section 168 allows businesses to claim accelerated depreciation, or “bonus depreciation,” on work vehicles and can often be used in conjunction with your Section 179 deduction. This lets you deduct a significant percentage of the vehicle’s value with no cost cap — 60 percent depreciation in 2024, dropping to 40 percent in 2025. This can reduce your tax burden.

What Vehicles Are Eligible for Section 168?

Most GMC trucks or vans with a Gross Vehicle Weight Rating (GVWR) of more than 6,000 pounds are eligible. However, these vehicles must be used at least 50 percent of the time for work-related purposes. We suggest tracking mileage and keeping receipts for gas and maintenance, especially if you’re splitting the vehicle’s use time between business and personal use.

What’s the Catch?

There are a few.

• The vehicle only qualifies in the year it enters service.
• If you’ve used the vehicle for any other purpose before this tax year, it won’t qualify.
• You cannot acquire the vehicle from a “related party,” defined by the IRS as a family member or a related business.
• The vehicle must be used for business purposes and have a definable useful service life.
• Your loan or lease terms may affect your eligibility.

Explore Our GMC Truck Models in Boonville, NY

GMC trucks are fantastic business vehicles. Their comfortable and tech-forward cabins keep your employees happy, their rugged and durable designs let you conquer each job site, and many of them are eligible for the Section 168 tax deduction. Visit our GMC dealership in Boonville, NY to learn more about the tax break and pick your model today! As with any business decision – especially one with tax implications – talk to your accountant or tax advisor.