Now might be the time to buy for your business.
The recently enacted Tax Cuts and Jobs Act implements a number of changes to the existing tax code, but one area remains unscathed: "heavy" vehicle purchases of section 179, or "the Hummer loophole." Essentially, business owners remain eligible to deduct up to $25k -- over six years -- of vehicle purchases (new or used) if it's used at least 50 percent for business, has a GVWR of over 6,000 pounds, and is purchased (not leased).
Yet, total section 179 equipment purchase deduction limits have increased to $2.5 million, meaning that if you're a business owner you now have more room to squeeze that vehicle purchase into your financials. As always, it's wise to consult your tax professional before acting, but it could mean that it's time to get a new business ride.
If that's the case, you're in luck because big SUVs are making a comeback, and they're better than ever. But don't think you've got to settle for a Tahoe or Expedition. There are actually a few SUVs that meet the criteria that are a little more business-class. Of those, the one we'd go for is the 2018 Volvo XC90.
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It's 6,005- to 6,635-lb. Gross Vehicle Weight -- that's maximum operating weight, not curb weight -- safely qualifies it for a section 179 deduction. Plus, it's the perfect level of understated (we all know how the majority of people feel about the tailgating, lane-cutting, BMW X5 driver), has loads of high-tech features, a supercharged and turbocharged engine, and best of all, it's fantastic to look at.
The XC90 is also rated at 29 mpg on the highway, which easily tops the Audi Q7, the Range Rover, and, of course, the Tahoe, Escalade, and Expedition. That means you'll save even more when using your business vehicle, while meanwhile retaining the same level of luxury. So if you're going to spring for a new business vehicle, consult your tax guru and go for the Volvo.
