Introduction
You have seen it on Instagram and TikTok. A 22-year-old “entrepreneur” buys a $150,000 Mercedes G-Wagon and brags to the camera, “I just wrote this off on my taxes!”
Is it a scam? Is it illegal? Or do the rich actually know a secret you don’t?
The truth is, it’s 100% legal. It is called the Section 179 Deduction, and thanks to the new 2026 tax laws, the loophole is wide open again.
But there is a catch. If you do it wrong, the IRS will audit you and hit you with massive penalties. Here is exactly how the “G-Wagon Loophole” works, which vehicles actually qualify, and how regular small business owners are using it to buy their dream cars at a massive discount.
1. What is the “G-Wagon Loophole”? (Section 179)
Normally, when you buy a car for your business, the IRS forces you to deduct the cost slowly over 5 years.
But Section 179 of the IRS tax code was created to help farmers and construction workers buy heavy equipment. It allows business owners to deduct the entire purchase price of heavy machinery in the very first year.
Somewhere along the line, clever accountants realized that certain luxury SUVs are so incredibly heavy that the IRS technically classifies them as “heavy machinery.”
The Golden Rule: To qualify for this massive tax write-off, the vehicle must have a Gross Vehicle Weight Rating (GVWR) of over 6,000 pounds.
2. The 2026 Update: 100% Bonus Depreciation is Back
For the past few years, the government was phasing this loophole out. But in 2026, 100% Bonus Depreciation has been fully restored.
What this means for your wallet: If you own an LLC and you buy a $100,000 vehicle that weighs over 6,000 lbs, you can deduct the entire $100,000 from your business profit this year.
The Math:
- Your Business Profit: $200,000
- Cost of Heavy SUV: $100,000
- New Taxable Income: $100,000
- The Result: Depending on your tax bracket, you just saved roughly $35,000 in cash that you would have otherwise paid to the IRS. The government basically just gave you a 35% discount on a luxury car.
3. The “Cheat Sheet”: Which Cars Actually Qualify?
Not every big car works. A standard Porsche Macan or a Toyota RAV4 is too light.
Here are the most popular luxury vehicles that hit the magical 6,000+ lbs GVWR requirement in 2026:
- Mercedes-Benz: G-Class (G-Wagon), GLS, GLE
- Tesla: Model X, Cybertruck (Model Y does not qualify)
- Porsche: Cayenne (Most trims, check the door sticker!)
- Cadillac: Escalade
- Chevy / GMC: Tahoe, Suburban, Yukon
- Ford: F-150, Expedition
- Land Rover: Range Rover, Defender
- Rivian: R1S, R1T
⚠️ Pro Tip: Never guess the weight. Open the driver’s side door and look at the sticker. It must explicitly say GVWR > 6,000 lbs.
4. The Catch (What TikTok Doesn’t Tell You)
Influencers leave out the fine print. You cannot just buy a G-Wagon, drive it to the grocery store, and write it off.
Rule #1: The 50% Business Use Test You must use the vehicle for business more than 50% of the time. If you use it 80% for business and 20% for personal road trips, you can only write off 80% of the purchase price. You must keep a mileage log.
Rule #2: You Must Actually Make Money You cannot write off a $100,000 car if your side hustle only made $10,000 this year. Section 179 cannot create a “net loss” for your business. (Though Bonus Depreciation can in some cases—talk to your CPA).
Rule #3: Depreciation Recapture If you write off the car this year, and then sell it three years from now, the IRS will want their tax money back on the sale price. The strategy here is usually to drive the car until the wheels fall off, or trade it in.
Conclusion: Stop Paying Full Price
The tax code was written to benefit business owners. If you are a high-income earner and you are buying a car without routing it through a business entity, you are voluntarily tipping the IRS.
How to get started:
- You need a legitimate business. You cannot do this as a W-2 employee.
- Find a vehicle over 6,000 lbs GVWR.
- Track your business miles religiously.
Don’t have a business yet? You need an LLC to start taking advantage of these write-offs. 👉 Read Next: The Ultimate Guide to Setting Up an LLC in 2026 (Note: Link this to your LLC Hub Page!)
