Thanks to the 2017 IRS Tax Cuts and Job Act, many small businesses that invest in new equipment, including qualifying new vehicles, will be able to write off up to the entire purchase cost of these purchases on their 2020 IRS returns.*

Normally, businesses spread these deductions over several years through depreciation. But now, many small businesses can write off up to the entire purchase cost of one or more qualifying new Ford trucks or vans.

IS THERE A CATCH?
Qualifying vehicles must be purchased and placed into service between January 1, 2020 and December 31, 2020. It must be used at least 50% for business, based on mileage, in the first year it is placed in service. So if you choose to use it for both personal and business purposes, the cost eligible for the deduction would be the percentage used for business.

For 2020, there are limits to the total purchase amount ($2,590,000) and on the total amount that can be written off ($1,040,000). The deduction begins to phase out on a dollar-for-dollar basis after $2,590,000 is spent by a given business (thus, the entire deduction goes away once $3,630,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.

For the 2020 tax year, the qualifying vehicle must be purchased and placed into service by December 31, 2020. 

Tax Benefit Examples For Qualifying Businesses

Tax TreatmentUp to 100% of the purchase cost in the first year (plus any remaining basis using MACRS method)Up to $25,000 of the purchase cost in the first year (plus any remaining basis using MACRS method)Up to $11,560 in the first year (plus any remaining basis using MACRS method)Up to $11,160 in the first year (plus any remaining basis using MACRS method)
Applies ToTrucks and Cargo Vans over 6,000 lbs. GVWRPassenger Trucks/Vans and SUVs over 6,000 lbs. GVWRTrucks and Cargo Vans under 6,000 lbs. GVWRPassenger Automobiles under 6,000 lbs. GVW
Eligible New Ford VehiclesF-150 (6.5-ft. or 8-ft.bed), F-250/F-350 Super Duty®, Transit VanExpedition, F-150 SuperCrew® (5.5-ft. or 6.5-ft. bed), Transit WagonTransit Connect Van, Transit Connect WagonEdge, Flex, Escape, Focus, Explorer, Fusion, Fiesta and Taurus



*: The information supplied here is provided by your local Ford Dealer as a public service to its customers. It should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability. Individual tax situations may vary. Federal rules and tax guidelines are subject to change. For more information about the Section 168(k) expense write-off or other business vehicle expense write-offs, you should consult your tax advisor for complete rules applicable to your transaction and visit the Internal Revenue Website at www.irs.gov