Quick Summary:
Section 179 is a tax break intended to help small businesses deduct the price of business equipment bought and put into service during the same year. In 2025, the limit increased to $2.5 million in deductions for qualifying property. Learn more about how it works and if you qualify.
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Browse EquipmentSection 179 is part of the Internal Revenue Code designed to help business owners improve their cash flow, specifically in years they have to purchase new equipment. It empowers fleet owners to expand operations without having to worry about staying afloat.
Deductions are eligible on purchases of new and used equipment, and even property that’s been financed. But there are some other conditions that must be true:
As a result of the One Big Beautiful Bill, signed in July 2025, the new Section 179 annual deduction limit is $2.5 million. That number phases out dollar for dollar when business purchases exceed $4 million, and phases out completely on purchases over $6.5 million.
To fully understand how this tax break works, let’s look at an example. Let’s say your business purchased a new or used telehandler in 2025 for $75,000. According to Section 179, you could claim a deduction for the full price of the telehandler on your taxes if
Assuming a 35% tax bracket, Section 179 would drop the net price of the telehandler to $48,750, saving you $26,250 in taxes.
Now, let’s say you purchased several new telehandlers for your business for a total cost of $4.7 million. This would trigger Section 179 to phase out since the total cost of equipment exceeds the limit by $700,000. The new amount you could claim is reduced to $1.8 million.
Bonus depreciation is another immediate tax deduction model that allows businesses to claim a large percentage of business equipment costs the year the asset is placed into service. Unlike Section 179, bonus depreciation has no dollar limit.
Often, bonus depreciation works in tandem with Section 179. Using the example above, you could use bonus depreciation to claim tax savings on the remaining cost of the telehandlers not covered by Section 179. Here’s how:
Find out the amount not covered by Section 179 by subtracting what is ($1.8 million) from the total cost ($4.7 million). The remaining $2.9 million can be deducted from your taxes using bonus depreciation. Again, assuming you’re within a 35% tax bracket, the total amount you would save is roughly $1.6 million.
Investing in new business equipment can be daunting, but using Section 179 deductions limits tax liabilities, helping small-to-medium sized businesses keep more money in their pockets. Now, you can keep operations moving with the equipment you need.
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Get My QuotePlease Note: Section 179 rules are complex and updated frequently by the IRS. This guide is intended for educational use only and should not be taken as professional tax advice. Please confirm your eligibility with a personal financial advisor or tax expert.
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