Need a tax deduction? Try GPS tracking
Finally, some good news from the IRS.
Have you heard of the Section 179 Deduction? It’s a rule in the Internal Revenue Code that lets you deduct the full purchase price of qualifying equipment and software in the year your company starts using it—even if you don’t pay the full amount in that year.
Let’s walk through what that could mean for both your company’s taxes and cash flow if you use Section 179 to buy GPS tracking this year for your fleet or fixed assets.
But first, we need to let you know that BrickHouse Security doesn’t offer tax advice because blah, blah, blah, and you should always speak with an accountant or other financial professional before yada, yada, yada. Okay, IRS? We good now?
Section 179: a rare gift from the IRS
Actually, the news is even better than that subhead suggests. When your business takes full advantage of Section 179, you can actually receive not one but two gifts from the IRS.
Gift #1: 100% depreciation this tax year
Until they put this rule into effect a few years ago, the IRS allowed companies to write off only a percentage of the value of their business equipment each year. If you bought a new truck, a set of computers, furniture for your office, etc., you’d be limited to deducting just a portion of those purchases against your taxable income. It would take your business years to reap the full benefits of those deductions.
Here’s how this rule changes all that, according to the official Section 179 page:
Gift #2: Immediate deduction even for financed purchases
Okay, so Section 179 lets you deduct the full value of any qualifying purchase in the year your company puts the equipment into use. If you buy a new utility vehicle or expensive piece of machinery, for example, you can write off the full purchase price against that year’s taxable income. That’s the great news. Here’s the amazing news.
The IRS actually lets you write off the full purchase price of business equipment in the current tax year even if you don’t pay the full amount for it in the current tax year.
Here’s how the official Section 179 page explains the key benefits of this additional gift to businesses:
- Immediate Tax Deduction:
Claim the full eligible deduction for qualifying equipment in the year it is placed in service—even if you finance the purchase.
- Enhanced Cash Flow:
Preserve working capital by avoiding a large upfront cash payment while still accessing significant tax savings.
- Improved Flexibility:
Financing allows you to invest in higher-quality or more advanced equipment without depleting cash reserves.
The primary advantage of financing your equipment is that you can deduct the full purchase price under Section 179 in the year the asset is placed in service—even if you don’t pay the full amount upfront. (You are reading this correctly; in many cases, the tax savings from the deduction will actually leave your bank account healthier than if you had paid cash.)
In other words, if you finance a business purchase (a new vehicle, or software, or a set of GPS trackers), you could actually end up with more money in tax savings that year than you paid out for the financed equipment.
Oh, and in case you’re wondering if there’s an upper dollar limit to these deductions, there is. But it’s high—$1,250,000 across all write-offs your business claims in tax year 2025.
Now let’s talk about how you can reap these tax advantages from purchases that can also benefit your business in many other ways: GPS tracking and video telematics solutions.
Thanks, IRS, for the GPS
GPS vehicle tracking and dash cams can deliver massive operational benefits for fleet-powered businesses like yours. Here are just a few examples:
- Safer driving behavior
- Lower fuel costs
- Greater vehicle ROI
- Enhanced visibility into field operations
- Increased accuracy of employee timecards
- Greater vehicle-theft protection
- Reduced insurance premiums
- Protection against lawsuits
- Improved customer service
Let’s look at how just one of these benefits—improved driver safety in your vehicles—could save your company a fortune.
Check out these two stats: one terrifying, the other awesome.
First, research by the Occupational Safety and Health Administration (OSHA) finds that the average on-the-job vehicle collision that results in an injury costs the employer $74,000. (If a fatality is involved, OSHA says that crash could cost more than $500,000.)
Clearly, anything your business can do to affordably reduce the risk of on-the-job collisions will be worth your company’s while. Now for the good news…
Research reported in the Journal of Safety Research found that when trucking companies installed both road-facing and driver-facing dash cams across their fleets, they reduced their crashes by 60%. The study also found that of the collisions that did occur, their average cost also went down by an incredible 86%.
Equipping your fleet (and even fixed assets, like expensive field equipment) with GPS and video telematics can deliver serious benefits to your company. But you can really turbocharge those benefits by adding in the cost savings available with the Section 179 Deduction.
Here’s how.
Let’s say your company wants to equip all 50 of your trucks with GPS tracking. We’re talking about the high-quality devices that send your company frequently updated data on vehicle location, driver behaviors (like speeding or sharp braking), and even diagnostic alerts so you can quickly get a vehicle in for maintenance. And let’s say those trackers cost about $25 per unit.
Let’s also say you choose to equip 20 of your key vehicles with dual-facing dash cams (cameras that capture video of both the road and the cabin). Those units cost $280 apiece.
Here’s what the Section 179 Deduction will look like.
Rather than depreciating the cost of the trackers and dash cams over several years, you can write off 100% of the expense in this tax year. As you can see, that will effectively lower your overall cost by 35% (assuming that’s your business’s tax bracket) once you’re able to claim those tax savings for the year.
You can plug in your own numbers using the official website’s calculator. Just go to Section179.org and click the Calculator button at the top.
And those benefits cover only Gift #1 from the IRS that we discussed above.
If you also want to claim Gift #2, you can finance your purchases of the software subscription plans that accompany these GPS solutions rather than paying for them outright.
At BrickHouse Security, for example, we never require our customers to sign up for any long-term service contracts. We prefer to let customers pay monthly, so we have to continually earn their business every month.
But if you did choose to sign up for our GPS or dash cam service plans with a longer-term agreement, you could still reap the full benefit of the Section 179 Deduction in the current tax year—even if you didn’t pay the full amount for those services in that year.
As the Section 179 official website says, you could finance a software agreement over a year or even several years, claim 100% of that purchase immediately, and gain the full tax savings in the current tax year.
It’s not often the IRS does something we believe is worth celebrating. But when they do, we’re happy to give the agency a shout-out.
Well done, IRS. Keep it up.
Get eyes on your fleet now
One more thing to note: you can apply the Section 179 Deduction to any purchases your business makes in a given tax year as long as you put the equipment into service by December 31 of that year.
That means, strictly from a tax perspective, you wouldn’t need to start equipping your company’s fleet with GPS or video telematics until December 2025.
But considering the substantial operational improvements they can mean for your business—and how much more affordable these devices can be with this deduction—why would you want to wait until December to start using them?
Heck, why would you want to wait until tomorrow?
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Until our next chat!
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