What is Section 168?

As the end of the year approaches, many businesses are looking at their revenue and expenses for the year. You may also be gathering information to prepare for tax season. Bernard’s Chrysler Dodge Jeep® RAM outlines Section 168 and how commercial vehicles like the 2025 RAM 1500 are affected.

What’s Section 168?

When it comes to the federal tax code, Section 168 refers to the Accelerated Cost Recovery System. It was initially proposed as part of the Economic Recovery Tax Act of 1981 to aid businesses during the recession. The depreciation method can provide a tax break.

What Qualifies?

When businesses invest in new equipment, they can qualify for Section 168. This can include new vehicles such as RAM trucks or vans. There are weight restrictions, so discussing your specific vehicle(s) with your tax advisor is essential.

How Does it Work?

If you utilize a RAM truck or van for your business, that can be considered qualified property. You can claim the cost of your vehicle as an expense, which qualifies as a deduction. You must claim the vehicle for the taxable year you purchased it (and began using it for commercial purposes). If you also bought an upfit for your commercial vehicle, it may also qualify.

Are There Limits?

There isn’t a set limit on the total amount you can deduct. However, you can only deduct up to 60 percent of the cost of your vehicle. This percentage is scheduled to decrease each year and eventually phase out by 2026.

Explore Our RAM Inventory in New Richmond, WI

With Section 168, now may be the perfect time to upgrade your fleet. We have an extensive selection of vehicles to choose from. Visit Bernard’s Chrysler Dodge Jeep RAM to shop today! While we strive for accuracy, we’re not the IRS. Remember, always discuss the tax implications of business decisions with your accountant!