Section 179, bonus depreciation and the 6,000 pound rule, explained without the hype.

 

Somewhere between residency and your third year of 1099 income, someone will tell you about the vehicle deduction. Usually it goes something like this: buy an SUV that weighs more than 6,000 pounds, put it in your S corp, and write off the entire purchase price this year.

That advice isn’t exactly wrong. But it’s missing a few considerations, and the missing pieces are where people get into trouble. Here’s the honest version.

 

What the weight rule actually does

There’s an annual cap on depreciation for what the tax law calls a passenger automobile. For 2026 it’s about $20,300 the first year, then roughly $19,800, $11,900 and $7,160. A $75,000 sedan takes most of a decade to write off.

Vehicles rated over 6,000 pounds aren’t passenger automobiles for this purpose, so the cap doesn’t apply. That’s the whole trick. It isn’t a special break for heavy vehicles. It’s an exemption from a limit on lighter ones.

Two things people get wrong. First, it’s gross vehicle weight rating, not what the car actually weighs, and it’s printed on the sticker inside the driver’s door jamb. Second, it varies by trim and drivetrain, so check the specific vehicle rather than the model name.

Also, Section 179 and bonus depreciation aren’t the same thing. Section 179 caps SUVs at $32,000 for 2026. The full write-off comes from bonus depreciation.

 

The part nobody mentions

Driving from home to work is commuting, and commuting isn’t deductible. It doesn’t matter what the vehicle weighs or who owns it. If you drive to the same hospital every day, most of your miles don’t count.

Locums or 1099 physicians often have a way around this. Trips between work sites on the same day are business travel, so covering several hospitals or EDs helps. And if you have a genuine home office that qualifies as your principal place of business, trips from home to your work locations count too. That one is powerful, but it has to be real. A laptop on the kitchen counter isn’t a home office.

 

You don’t need 100% business use

You need more than 50%. Above that, you just deduct your actual percentage. At 78% business use on a $90,000 vehicle, you’re deducting around $70,000. That’s plenty, and you can defend it.

Claiming 100% on the car sitting in your driveway is the fastest way to lose the entire deduction. Don’t.

 

Your mileage log is the deduction

Vehicle expenses have strict substantiation rules and no reasonable-estimate fallback. No log, no deduction. Use an app, let it run, glance at it once a month. A spreadsheet you rebuild in March from your calendar is weak evidence.

 

Why we often suggest the mileage rate instead

The other method is a flat rate per business mile: 72.5 cents for the first half of 2026, 76 cents for the second half. For a lot of physicians that produces more deduction, not less, and it’s much simpler.

Rough rule of thumb. Expensive vehicle plus modest business miles favors depreciation. Normal vehicle plus a lot of miles favors the mileage rate.

One decision can’t be undone. If you ever want the option to use the mileage rate on a vehicle, you have to use it in the first year. Take bonus depreciation instead and that car is locked into the actual expense method for as long as you own it. Call us before the first return, not after.

 

You pay it back later

A large first-year deduction drops your basis to almost nothing. When you sell or trade the vehicle, that comes back as income. Trade-ins count as sales. If you swap cars every three years, you’re mostly moving deductions around rather than saving tax.

A few other things

If your S corp owns the vehicle, your personal use gets added to your W-2. A company-titled vehicle usually needs commercial auto coverage, so check with your agent before retitling. Financing doesn’t change the deduction, but you’ll make nondeductible principal payments for years afterward. And the federal EV credits ended for vehicles acquired after September 30, 2025.

The question to ask first

Would you buy this vehicle at this price if there were no deduction at all?

If yes, good, the tax treatment is a real discount. If the deduction is the reason you’re buying, you’re spending a dollar to save about thirty-seven cents.

Let’s run your numbers

MirchCPA works with independent physicians and small practice owners across North Carolina and across the country, and this exact conversation comes up several times a year. Filing the return is the easy part. The money is made before you sign anything: how the vehicle gets titled, which method you elect in the first year, what your defensible business use percentage actually is, and whether the purchase still makes sense once the state add-back and the eventual sale are in the picture.

So if you’re within a year of buying or replacing a work vehicle, talk to us before you go to the dealership. Send us the vehicle you’re considering, the price, and roughly how many business miles you drive, and we’ll model the purchase against the mileage method and show you the real after-tax cost of each. It takes about twenty minutes and it’s a lot cheaper than trying to fix an election after the return is filed.

Call us at 704-935-4525, email staff@mirchcpa.com, or book a time here. We handle bookkeeping, payroll, entity structuring and year-round tax planning for physician practices, so if we’re only talking in April, you’re probably leaving money on the table.