Section 179 Tax Savings
2026 BMW Business Tax Deduction Guide
Section 179 and North Carolina
What Business Vehicle Buyers Should Know
Federal Section 179 can let you deduct a qualifying business vehicle in the year you buy it. North Carolina handles it differently, so plan for both.
$25,000
NC Section 179 limit, with a $200,000 investment limit. Federal limits are much higher.
85%
Share of the amount over the NC limit that is added back to NC income in the year you buy.
5 Years
The added-back amount is deducted at 20% a year over the next five years.
The adjustment changes when you get the deduction on your NC return, not the asset's tax basis. NC also requires a similar addback for federal bonus depreciation.
How much could you deduct?
Illustrative example: A $100,000 work truck
Say a business buys a qualifying $100,000 vehicle and takes the full amount as a federal Section 179 deduction.
| Tax Year | Federal Deduction | NC Deduction |
| Year of purchase | $100,000 | $36,250 |
| Years 2 to 6 | $0 | $12,750 each year |
| Total | $100,000 | $100,000 |
Illustration only. Assumes the full cost is expensed, no phase-out, and enough income to use the deductions. In year one, NC allows the $25,000 limit plus the 15% of the $75,000 excess that is not added back ($11,250). The $63,750 addback is then deducted at $12,750 a year for five years.
Does My Vehicle Qualify?
Federal rules limit the Section 179 deduction for many passenger vehicles and SUVs. Heavier and certain work vehicles are often treated differently, and business-use percentage matters. Ask us for the weight rating and specs on any vehicle you're considering, and have your tax professional confirm what applies.
General information only, not tax or legal advice. Tax rules, limits and North Carolina conformity can change, and your situation may differ. Consult a qualified tax professional or the North Carolina Department of Revenue before making purchase decisions.
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BMW of Asheville
31 Skyland Inn Drive
Arden, NC 28704
- Sales: 828-681-9900
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