IRS Section 179 and 168(k) Potential Tax Advantages

Business owners have the opportunity to make their next BMW purchase even more rewarding thanks to potential benefits made possible by Sections 179 and 168(k) of the IRS tax code. Choosing a new BMW X5, X6, or X7 SUV instead of a luxury sedan can be a smart decision that provides advantages not only for you, but for your business as well. Important changes for the 2025 Tax Year can help you save even more.

IRS Section 179 for 2025

Section 179 allows businesses to deduct the price of qualifying equipment, such as vehicles, purchased or financed during the tax year. The IRS breaks down eligible vehicles into Light, Heavy, and Other categories.

Three BMW SUVs meet the requirements of the “Heavy” category — defined as vehicles with a GVWR over 6,000 pounds but not more than 14,000 pounds. These include the BMW X5, BMW X6, and BMW X7.

For the 2025 tax year, Section 179 allows for a maximum depreciation of $31,300 for Heavy vehicles placed into service before January 1, 2026, assuming the vehicle meets all IRS usage requirements listed below.

• Vehicle can be new or used, purchased via an arm’s-length transaction, titled in the business name, and financed with qualified loans/leases.
• Vehicle must be used at least 50% for business purposes.
• You may only claim the deduction in the tax year the vehicle is placed into service.
• Vehicles used personally before converting to business use do not qualify.
• Note: Individual tax situations vary. Consult your tax advisor.

IRS Section 168(k) “Bonus Depreciation”

Section 168(k) allows up to 100% bonus depreciation of the purchase price of a qualifying BMW X5, X6, or X7 through the end of 2025. When combined with the $31,300 Section 179 deduction, you may be able to fully depreciate your qualifying purchase in the first year — instead of over several years — delivering significant tax savings for your business.