Deductions & credits

Your question: I believe under section 179 I should be able to take 100% of the vehicle cost.

• That is incorrect.  If you are using the vehicle greater than 50% for business use, then you can take the business use percentage of the vehicle as a Section 179 expense. However, vehicles have special rules and overall limits for depreciation.
  • Depreciation Limits: Placed in service during calendar year 2020, the depreciation limit under Sec. 280F(d)(7) is $18,100 for the first tax year; $16,100 for the second tax year; $9,700 for the third tax year; and $5,760 for each succeeding year, all unchanged from 2019. (Publication 463 has not been updated for 2020 so the link takes you to the 2019 version)

Special depreciation and Section 179 are two different options to choose from.  Both would allow only the business use percentage and only because it is used greater than 50% for business.

Once you select that you want to use 'actual expenses' then the Section 179 question will come up.  Read the screen carefully, because it should show you the maximum amount allowed.

Go back to select your vehicle and when you select 'Edit' you will go through each screen again to reach the Section 179. Enter your amount and select 'I don't want to take the special depreciation allowance (you can't do both). See the image below.