Buy a Tesla Model X and Deduct $160,000 from your Taxable Income | Tax deductions

The Section 179 tax code allows small businesses to immediately deduct the full purchase price of qualifying equipment (including vehicles weighing > 6000 lbs) from their taxable income, rather than having to depreciate it over time. This can be a significant benefit for small businesses because it allows them to write off the cost of equipment and software all at once, which can help them save money on taxes and free up cash for other business expenses.

In order to use the Section 179 deduction to own a Model X and deduct the entire purchase price from taxable income, the Model X must be used primarily for business purposes and must be placed into service during the tax year.

For example, if a small business owner purchases a Model X for $165,000 (rough price for Model X Plaid with full self driving) and uses it primarily for business purposes, such as transporting clients or goods, they may be able to claim the full $165,000 as a Section 179 deduction on their tax return. This would allow them to immediately write off the full purchase price of the Model X from their taxable income, potentially saving them thousands of dollars in taxes.

It’s important to note that the Model X must be used primarily for business purposes in order to qualify for the Section 179 deduction. If the Model X is used primarily for personal purposes, it may not be eligible for the deduction. It’s also worth noting that the maximum Section 179 deduction for tax year 2023 is $1,160,000, and the maximum amount that a business can spend on qualifying equipment and software is $2,890,000. Any amounts above these limits may be eligible for a 50% bonus depreciation deduction.