If the financial alphas of TikTok are to be believed, there’s a secret loophole in US tax code that allows you to buy a Mercedes G-Wagon and deduct its cost from your taxes. They’re not entirely wrong—let’s dive into Section 179, hustle culture, and how the G-Class ended up becoming a status symbol in more ways than one.
Really, it’s “G-Wagen” as in Gelandewagen, which is pretty much just German for “off-roader.” But colloquially, it’s a “Wagon” stateside.
Not everybody driving around in a Merc G is committing tax fraud, but the vehicle’s unique combination of specs and appeal does open the door for shady small-biz shenanigans.
See, in late 2010, Congress passed the Small Business Jobs Act. It was designed to help small businesses recover from the financial crisis of 2008, and provided business owners with access to lending programs, increased limits on what they could borrow, and tax cuts on essential equipment.
A part of that was what’s known as Section 179. Section 179 of the IRS’s Publication 946 deals specifically with large equipment needed for work. As our Editor-In-Chief, Kyle Cheromcha, breaks it down in the video above, for example, if a farmer needs a $50,000 tractor, but only puts $5,000 down and finances the rest, they can still write down the entire purchase on their taxes in the first year. The spirit of this is so companies can acquire expensive, unique equipment like construction vehicles or restaurant kitchen appliances. But it gets a little murky when it comes to road-going vehicles.
A road vehicle can be eligible for this deduction if it’s used at least 50% for business, and has a GVWR of between 6,000 and 14,000 pounds. When this rule was minted, that pretty much only included heavy-duty trucks, not luxury vehicles. But of course, the Mercedes G-Class is both. And now that more cars than ever are extremely heavy, and plenty of work trucks are loaded with luxury features, Section 179 is more susceptible to abuse than ever.
Check out the video for the full breakdown of how we got here, and whether or not claiming a $150,000 luxury SUV on your taxes is a good idea.
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