I have been talking about Tax Code 179 for many years on air. It still amazes me that many CPAs and tax preparers have no idea what I am talking about. This program has been around over 50 years, although the dollar amounts change almost yearly. Essentially it was created for farmers to be able to buy large equipment and use the expense as a write-off.About five years ago, larger vehicles were included.

Those that have a 6000 pound gross vehicle weight rating qualify. It is important to understand that gross vehicle weight is not the same as the curb weight of a vehicle. In the Ford line, F150 and larger qualify, as does Expedition.

So in this case, bigger is better. In an odd quirk in the tax laws, large business vehicles, such as sport utility vehicles and trucks that weigh more than 6,000 pounds aren't considered autos. As such, they don't apply for the first-year depreciation rules which limit the amount of depreciation one can take. If your business vehicle exceeds the 6,000-pound limit, you can bypass the restrictive rules relative to regular and luxury autos and move directly to the Section 179 expensing rules -- which allow for a first-year deduction of all business assets purchased up to $250,000 for 2008.

So consider Jack, who buys that $50,000 Lexus or any vehicle less than 6,000 pounds and uses it 100% for business. His first-year depreciation would be less than $10,000 since this vehicle is less than 6,000 pounds and is therefore subject to the luxury auto rules. The balance of the cost of the vehicle will be depreciated over a five-year (and perhaps longer) period.

But Jill, who buys that tricked-out SUV for $60,000 and uses it 100% for business, will be able to use Section 179 to expense up to $25,000 of that baby and depreciate the balance over 5 years, since it weighs more than 6,000 pounds. If Jill purchased a truck then the $25,000 limit on vehicle Section 179 is lifted and she can expense the full business portion of that truck.

Regardless of the business assets you purchase, the law will help you greatly reduce your taxable income and, thus, your associated income taxes. The net effect is that this will reduce the price you pay for your new vehicle.

When you combine this with the huge incentives right now, business owners and self employed people can truly save a ton of money on this years taxes.

Jerry Reynolds is the Host of the CarGuy Show heard Saturdays on WBAP AM in Dallas 9 to 11 AM, and 97.5 FM the Ticket in Houston 11 to 1 Saturdays. You can also catch Jerry on CarGuys Garage, every Friday night on the First in Prime CBS 21 news.