Using IRS Section 179 for Van Life
There is a provision of the IRS tax code that is highly applicable to van life in the U.S.: Section 179. The US government has established Section 179 to help stimulate the economy and inspire companies to invest in themselves. This tax credit allows companies during the tax year to subtract the entire purchasing price of eligible equipment and/or computer software. Commercial vans count for a deduction (i.e. Mercedes-Benz Sprinters, Ford Transits, Dodge ProMasters, etc.)! Section 179 is important to remember since your taxes will save you tens of thousands of dollars. The cost of your brand new van can also be massively offset.
In layman’s terms, what this means is that if you buy or lease a commercial van through your company, you can subtract your vehicle’s maximum purchase price from your gross income. Without deductions under Section 179, corporations usually write-off transactions by the depreciation in small chunks. Let’s say your company buys a $50,000 van, for instance. You are entitled to write off $10,000 every year for five years after the purchase ($10,000 is a hypothetical amount I am using for this example). While this is better than no write-off at all, in the first year, many company owners choose to subtract the full amount of $50,000, thus reducing their tax liability. Section 179 encourages you to do just that!
You can read more about Section 179 at: https://www.section179.org.