Now may be the time for your company to purchase equipment and take advantage of the increased limits for Section 179 deduction benefit included in the Tax Cuts and Jobs Act.
Section 179
The 2025 Section 179 tax deduction enables businesses to immediately write off up to $2,500,000 in qualifying new and used equipment purchases—rather than depreciating them over many years. This powerful business tax incentive applies to both new and used equipment, vehicles, software, and certain improvements, allowing you to invest in growth while significantly reducing your tax liability. Whether you’re upgrading surveying equipment, updating software, or modernizing office technology, Section 179 helps small and medium-sized businesses save money while expanding operations. Equipment must be purchased and placed into service by December 31, 2025.
Bonus Depreciation
The Act also increases the benefit of bonus depreciation, allowing businesses of all sizes to deduct the full cost of qualifying new and used equipment purchased and placed into service by December 31, 2025.
Quick Reference:
- Section 179 Deduction Limit: $2,500,000
- Phase‑out Threshold: $4,000,000 (Deduction reduces dollar‑for‑dollar above this amount)
- Bonus Depreciation: 100% (available after Section 179 is applied)
- Business Use Requirement: More than 50% business use
- SUV/Truck Limit: $31,300 for vehicles over 6,000 lbs GVWR
- Deadline: December 31, 2025
Note: The Section 179 deduction phases out dollar‑for‑dollar when total qualifying purchases exceed $4,000,000 and is fully phased out at $6,500,000.
H.R.1 (effective for tax years beginning after December 31, 2024) doubled the Section 179 limit to $2,500,000, raised the phase‑out threshold to $4,000,000, and reinstated 100% bonus depreciation.
Many types of equipment may qualify:
- Agricultural
- Commercial Truck and Trailers
- Construction
- Survey Equipment
- Manufacturing
- Material Handling
- Medical
- Office Equipment and Technology
- Printing Presses
- Rail
What this may mean for your company
- May be more economical to upgrade equipment
- Lower tax liability for the year conserves working capital for other immediate business needs
- Many leasing or financing options can be utilized while taking advantage of the tax incentives
Want to talk about leveraging this tax credit for your equipment purchases before the end of the year? Contact [email protected] for more.
*Note: Section 179 should be considered after consultation with your business owner or a tax advisor for implementation during 2025*