Buying a Work Truck Before Year End: Section 179 and Bonus Depreciation (2026)

If you buy a work truck or van rated over 6,000 pounds, have it in service by December 31, 2026, and use it more than 50% for business, you can usually deduct its business-use cost in full on your 2026 return, through 100% bonus depreciation or section 179. A vehicle rated 6,000 pounds or less is a passenger car for tax purposes, and its first-year write-off is capped at $20,300. Financed counts. The catch is on the other end: when you sell or trade that truck in, the depreciation you took comes back as ordinary income.

December is when the dealer reminds you about section 179. Here is what the rule actually gives you, what it takes, and the part the dealer leaves out.

What changed for 2026

The One Big Beautiful Bill Act made 100% bonus depreciation permanent for property acquired and placed in service after January 19, 2025. Before the law, bonus was stepping down, to 40% in 2025 and 20% in 2026. Now there is no step-down and no expiry date.

Section 179 rose too. For tax years beginning in 2026, the IRS's inflation figures put it at:

No trade shop is near the phase-out. The two numbers that matter are the vehicle's weight rating and the date it goes into service.

One exception to the 100%: a vehicle you bought, or signed a binding contract for, before January 20, 2025 and only placed in service in 2026 gets 20% bonus, the old schedule.

The weight rule: check the door jamb

The tax code treats a truck or van rated 6,000 pounds or less gross vehicle weight as a passenger automobile, and caps how much depreciation you can take on it each year. Above 6,000 pounds, the caps don't apply.

The rating is gross vehicle weight, what the truck can carry loaded, not what it weighs empty. It is on the certification label in the driver's door jamb. Most three-quarter-ton and one-ton pickups and full-size cargo vans are well over 6,000 pounds. Some half-ton pickups are near the line, so read the label before you sign rather than after.

SUVs are the in-between case. A heavy SUV escapes the passenger car caps, but its section 179 deduction is capped at $32,000. Vehicles that are not treated as SUVs for that cap include a pickup with a bed at least six feet long and a cargo van with no seating behind the driver. Ask your CPA how the rest of an SUV's cost is handled.

It has to be in service, not just bought

Depreciation starts when the vehicle is placed in service: ready and available for the job you bought it for. A signed buyer's order on December 20 for a van that is still at the upfitter in January is a 2027 deduction.

The IRS's own depreciation publication uses a contractor as the example. He buys a truck that has to be fitted with lifting equipment before it can do its job. The truck is placed in service the day the work is done and he accepts delivery, not the day he paid.

If you are buying a service van that needs shelving, a ladder rack or a lift gate before it goes out on calls, the date that counts is the day it comes back ready.

More than half for business, and records to prove it

Section 179 and bonus depreciation on a vehicle require more than 50% business use. You deduct the business share: a truck used 90% for work deducts 90% of its cost. At 50% or below, you get neither, only slower straight-line depreciation.

The test keeps going after year one. If business use drops to 50% or less in a later year, you add back the excess depreciation as income that year.

That makes the mileage log part of the deduction. For a pickup that also goes to the lake on weekends, keep one.

A van built for work is different. A van with only a front seat, permanent shelving filling most of the cargo area, that constantly carries equipment and is painted with the company's name is what the IRS calls a qualified nonpersonal use vehicle. The rules treat it as not likely to be used personally, so it is outside the passenger car caps and the listed-property rules entirely.

A worked example

A plumbing shop buys a three-quarter-ton pickup with a utility bed for $68,000, financed, on December 12, 2026. It is delivered ready to work on December 18. The tech who drives it takes it home, and the owner estimates 90% business use.

For a sole proprietor or an S corporation owner, that is $61,200 off 2026 profit, and for a Schedule C filer it lowers self-employment tax as well. On a loan, the shop may have paid less than $10,000 out of pocket by December 31. The deduction is the full $61,200 anyway.

Now read the second line of that table the other way. The shop spent $68,000 to save roughly $15,000 to $20,000 in tax. That is a good trade if it needed the truck. It is a bad one if it didn't. Buy the truck because the shop needs a truck, then let the timing work for you.

The part the dealer doesn't mention

Recapture. When you sell or trade in a vehicle you depreciated, the gain up to the depreciation you took is taxed as ordinary income. Write the pickup above off to zero, sell it in 2030 for $30,000, and that is $30,000 of income in 2030.

Trade-ins aren't tax-free anymore. Before 2018, trading in a truck was a like-kind exchange and the gain rolled into the new one. Since 2018, like-kind exchanges cover real estate only. A trade-in is a sale of the old truck, with recapture, and a purchase of the new one.

No standard mileage later. Once you take section 179, bonus or accelerated depreciation on a vehicle, you can never use the standard mileage rate for it. For 2026 that rate is 72.5 cents a mile through June 30 and 76 cents from July 1, after a mid-year increase. A shop that drives a lot of miles in an inexpensive vehicle can come out ahead on mileage. Choose in the first year; you can't switch to the standard rate later.

A smaller deduction in later years. Taking it all in 2026 leaves nothing for 2027 through 2031. If 2026 was a slow year and 2027 looks better, your CPA may elect out of bonus for the class, or take only part under section 179. The election out of bonus covers the whole class of property for the year and can't be undone without IRS consent.

Your state may not follow. Many states don't conform to federal bonus depreciation or the federal section 179 limit. California's section 179 limit is $25,000. Texas has no personal income tax, so there the question is federal only; anywhere else, ask what your state allows.

Before you sign in December

1. Read the GVWR on the door jamb. Over 6,000 pounds is a different deduction.
2. Get a delivery date in writing, and count the upfit. In service by December 31, or it is a 2027 deduction.
3. Decide the business-use percentage honestly, and start the mileage log on day one if the truck goes home.
4. Ask your CPA which election fits this year. Full bonus, partial section 179, or regular depreciation depends on what 2026 and 2027 look like.
5. Keep the paperwork together: the buyer's order, the delivery date, the loan agreement, and the title of the truck you traded in.

The rest of the year-end list is in what your CPA needs at year end, and the deductions beyond the truck are in tax deductions for trade contractors.

How Poof keeps the truck on the books

In Poof, a truck bought on a bill or a card shows up as a card to put it on the fixed-asset register. The register runs its depreciation by class and posts the month's figure as one card you approve. The truck's loan has its own schedule, with each payment split into principal and interest. Trade in the old one and the whole thing is one entry: the old truck off with its gain or loss worked out, its loan paid off, the new truck and its loan on.

At year end, the package for your CPA has the fixed-asset roll-forward, and the vehicles, depreciation and section 179 questions come with the books' numbers beside them. Which election to take stays your CPA's call, not Poof's.

*General information, not tax advice; your CPA has the final word.*

*Written by Austin Semple, a former controller: two years in audit, seven running the books for small businesses, and the founder of Poof. Poof puts the truck, its loan and its depreciation on the books without a spreadsheet. Start free, no card required.*