A truck or van is one of the biggest purchases a trades business makes. Price matters, but so do cash flow, how hard you'll drive it, and what you can deduct. Here's a plain-language walk-through for 2026.

Start with how you'll really use it

Before comparing payments, estimate your miles and how much of that driving is for business. Most of the tax benefits below depend on business-use percentage, meaning the share of total miles driven for work. Driving between job sites counts; a regular commute generally doesn't.

That percentage matters a lot. The faster write-offs for a vehicle you buy require more than 50% business use. If business use later drops to 50% or less, you may have to switch to slower depreciation and add some of the earlier deduction back into income (IRS Publication 463, 2025). Leases also come with mileage caps, and overage charges can erase a low monthly payment.

Buying: bigger write-offs, more cash up front

When you buy, you deduct the cost over time through depreciation, which spreads the cost of something you'll use for years across those years. Two rules can speed that up:

  • Bonus depreciation lets you deduct a large share of the cost in the first year. Under the 2025 tax law, 100% bonus depreciation is now permanent for qualifying property acquired after January 19, 2025 (IRS, 2026).
  • Section 179 is an election to expense equipment right away. For 2026, the overall limit is $2,560,000, but heavy SUVs are capped at $32,000 (IRS Rev. Proc. 2025-32, 2025). Some vehicles don't count as SUVs for that cap, such as a pickup with an open cargo bed at least six feet long (26 U.S.C. §179).

There's a catch for ordinary cars, light trucks and vans. If a vehicle is rated at 6,000 pounds gross vehicle weight or less, the IRS caps yearly depreciation (IRS Publication 463, 2025). For vehicles placed in service in 2026 that get bonus depreciation, the caps are $20,300 the first year, $19,800 the second, $11,900 the third and $7,160 each year after that (IRS Rev. Proc. 2026-15, 2026). Without bonus, the first-year cap is $12,300.

Say a handyman buys a $45,000 small SUV used only for work. The first-year deduction still tops out at $20,300. A work truck over 6,000 pounds isn't subject to those caps, so check the weight rating before you buy.

Leasing: lower payments, steadier deductions

With a lease, there's no depreciation. You deduct the business share of each lease payment instead, which keeps things simple and steady.

If the vehicle is pricey, there's a small adjustment called a lease inclusion amount. It's a figure from an IRS table that trims your lease deduction. For 2026 leases, it applies only when the vehicle's fair market value is over $62,000. At the low end of the table the amounts are small, for example $8 in the first year for a vehicle worth $62,001 to $64,000 (IRS Rev. Proc. 2026-15, 2026).

Mileage rate or actual costs?

Whether you buy or lease, you'll choose between two ways to deduct driving:

  • Standard mileage rate: a flat amount per business mile. The IRS set the 2026 rate at 72.5 cents (IRS, 2025), then raised it to 76 cents for miles driven from July 1, 2026, citing fuel prices (IRS Announcement 2026-11, 2026).
  • Actual expenses: the business share of gas, repairs, insurance, registration, and depreciation or lease payments.

Say an electrician drives 7,500 business miles in the first half of 2026 and 7,500 in the second. That works out to $5,437.50 plus $5,700, or $11,137.50.

Timing rules matter here. If you own the vehicle and want the mileage rate, you have to use it in the first year the vehicle is available for business use. If you lease and choose the mileage rate, you have to stick with it for the whole lease, including renewals (IRS, 2025).

Either way, keep a log

Vehicles fall under a stricter recordkeeping rule. You need to show the amount, the time and place, and the business purpose of each trip (26 U.S.C. §274(d)).

One real case shows why. In Houchin v. Commissioner, T.C. Summary Opinion 2014-29, a self-employed newspaper recycler claimed $17,978 in truck expenses against $1,274 of gross income. His log had dates and odometer readings but no destinations or business purpose. Later he added places he guessed he may have gone. The Tax Court accepted that he did drive for business, but said "section 274(d) precludes estimates" and disallowed the deduction (U.S. Tax Court opinion via CourtListener, 2014). Summary opinions aren't precedent, but the lesson holds: log trips as you go.

A quick checklist before you sign

  • Estimate your yearly miles and business-use percentage.
  • Compare total cost over the years you'll keep it, not the monthly payment.
  • Check the gross vehicle weight rating if you're counting on a big first-year write-off.
  • Make sure a down payment won't drain your operating cash.
  • Pick a mileage-tracking app or notebook on day one.

If you're weighing a vehicle decision this year, we're happy to run the numbers with you. Reach out to Reflexivity anytime.

General information, not tax advice.