In the United States, there’s a section of the IRS tax code that’s extremely pertinent to van life: Section 179. Section 179 was created by the US government to help stimulate the economy and motivate businesses to invest in themselves. This tax credit allows businesses to deduct the full purchase price of qualifying equipment and/or computer software during the tax year. Commercial vans (i.e. Mercedes-Benz Sprinters, Ford Transits, Dodge ProMasters, etc.) qualify for a deduction! Section 179 is important to know about because it can save you tens of thousands of dollars on your taxes. It can also massively offset the cost of your shiny new van.
What this means in layman’s terms is, if you buy or lease a commercial van through your business, you can deduct the full purchase price of your vehicle from your gross income. Without Section 179 deductions, businesses typically write-off purchases in small chunks through depreciation. For example, let’s say your company buys a $50,000 van. Following the purchase, you are allowed to write off $10,000 per year for five years ($10,000 is a hypothetical figure I’m using for this example). While this is better than no write-off at all, many business owners prefer to deduct the entire sum of $50,000 in the first year, thus reducing their tax liability. Section 179 allows you to do just that! As of 2019, Section 179 allows full deductions of up to $1,000,000 per year.
If you’re considering buying a new van, I highly suggest you consult with a qualified tax professional about this awesome loophole! You can read more about Section 179 at: https://www.section179.org.
Should you need more guidance, I’ve written a new eBook containing 23 additional tips and tricks that pertain to commercial vans and van living. Regardless of whether you use your van for work or leisure, live in a van full-time, or aim to camp in your vehicle on weekend, I’m confident you’ll find my advice helpful. It’s also worth mentioning that I don’t only focus on Sprinter vans in the book.
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