Back

Section 179: What is it?

Nov. 12 2025 Blog By Quality Equipment Sales and Service, Inc.

Share

What is Section 179?

Section 179 is an IRS tax provision that allows businesses to immediately deduct the full purchase price of qualifying equipment rather than depreciating it over several years. For many business owners, this means substantial tax savings in the same year the equipment is purchased and put into service. 


What Qualifies for Section 179?

To qualify, equipment must be tangible business property that is:

  • Used more than 50% for business purposes.

  • Purchased and placed in service during the 2025 tax year.

Qualifying property generally includes:

  • Machinery and equipment (constructions, agricultural, material handling, etc.) - new or used.

  • Business vehicles (subject to specific IRS weight and usage rules).

  • Office furniture, computers, and business software.

  • Certain building improvements, such as HVAC, roofs, and security systems.

Always check with your tax professional to confirm whether your purchases qualify - every business situation is different.


Why Businesses Use Section 179

Choosing Section 179 ( instead of standard depreciation) can help you:

  • Reduce taxable income immediately with a larger up-front deduction.

  • Simplify accounting instead of tracking multi-year depreciation. 

  • Time equipment upgrades to maximize year-end strategy.

It's a popular tool for companies planning major purchases or wanting to preserve cash flow through financing.

What's New in 2025 - The One Big Beautiful Bill (OBBB)

The recently passed One Big Beautiful Bill Act makes important updates to Section 179 and bonus depreciation:

  • Raises the maximum Section 179 deduction to $2.5 million for tax years beginning after December 31, 2024.

  • Increase the phase-out threshold to $4 million of qualified equipment purchases.

  • Reinstates 100% bonus depreciation for eligible new and used property placed in service after January 19, 2025. 

  • Provides added flexibility and a longer window for equipment investment planning. 

⚠️ These numbers reflect federal guidelines as of October 2025. Always verify with your tax advisor for the latest figures and state rules.


2025 Section 179 Limits at a Glance

  Limit Type

       2025 Amount

  Deduction Limit

       $2,500,000

  Spending Cap (before phase-out)

       $4,000,000

  Bonus Depreciation

       100% (for qualifying property)


To claim the deduction for 2025, equipment must be purchased, received, and placed in service by December 31, 2025.


Ways to Leverage Section 179

  1. Plan Ahead- Review your equipment needs early. If you know you'll be replacing or upgrading machinery, get ahead of lead times to ensure delivery before year-end.

  2. Upgrade Your Fleet- Section 179 makes it easier to justify that new tractor, forklift, or loader. Both new and used equipment qualify - as long as they are new to your business and used for over 50% of work-related tasks.

  3. Finance and Save- Financing your equipment purchase doesn't disqualify you - you can still claim the full deduction while protecting cash flow. 


Quick Reminders

  • Section 179 can't create a loss - deductions are limited to your business's taxable income.

  • Special vehicle rules apply (SUVs over 6,000 lbs. GVWR may qualify differently).

  • State laws do not always mirror federal Section 179 rules.

  • Equipment must be in service by December 31, 2025, to count for this tax year.


Disclaimer

Quality Equipment is not a tax advisor. This article is for general informational purposes only. Please consult your CPA or tax professional for advice specific to your business, state laws, and eligibility.