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News & Events

Take Advantage of the Tax Deductions Available Under Section 179

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

Section 179 allows businesses to deduct the full cost of qualifying new and used equipment from your 2023 taxes, up to $1,160,000. The ability to take deductions under Section 179 now begins to phase out for total equipment purchases in excess of $2,890,000. The phase out is on a dollar dollar-for -dollar basis once equipment purchases exceed $2,890,000. Equipment must be purchased and placed into service by December 31, 2023.

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, 2023.

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

2023 Example Calculation

Total 2023 equipment investment $1,500,000
Section 179 deduction limit $1,160,000
80% bonus depreciation available for excess* $272,000
Total 2023 tax deduction: $1,160,000 + $272,000 $1,432,000
Potential tax savings on the first year (assuming a 21% tax rate) $300,720

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 2023*