Section 179 Equipment Tax Incentives for 2025
A Guide for Dealers, OEMs, and Equipment-Driven Industries
Section 179 and Bonus Depreciation are two of the most powerful U.S. tax incentives for businesses acquiring equipment. In 2025, these incentives directly impact dealers, OEMs, construction companies, manufacturers, transportation fleets, and other industries that rely on capital equipment.
This page explains the current Section 179 limits, how Bonus Depreciation works, how equipment financing maximizes tax savings, and why these incentives accelerate equipment purchases across multiple B2B sectors.
Section 179 Deduction Limit for 2025
2025 Section 179 Key Limits
Section 179 allows eligible businesses to deduct up to $2,500,000 of qualifying equipment purchased and placed in service during the 2025 tax year.
This structure is designed for small and mid-sized businesses. Once total equipment purchases exceed $4,000,000, the deduction reduces dollar-for-dollar until it disappears at $6,500,000.
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$2,5M
Deduction capMaximum amount you can deduct under Section 179.
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$4M
Phase-out thresholdPurchase level where deduction starts reducing.
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$6,5M
Full phase-outPoint where Section 179 deduction is eliminated.
Bonus Depreciation Advantages
100% Bonus Depreciation in 2025
Bonus Depreciation has been reinstated at 100%. This allows businesses to depreciate 100% of the cost of qualifying new and used equipment.
Bonus Depreciation Advantages
- No spending cap
- Applies after Section 179 is used
- Available for new and used assets
- Ideal for large capital acquisitions
- Supports businesses exceeding Section 179 limits
When combined with Section 179, Bonus Depreciation creates a powerful first-year tax strategy for equipment-intensive industries.
Industries Benefiting Most
Why Section 179 + Bonus Depreciation Is a High-Impact Strategy
Businesses can use Section 179 to deduct the first $2.5M in qualifying equipment. Bonus Depreciation then applies to remaining purchases with no limit. Industries Benefiting Most:
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Maximize Section 179 Tax Benefits
Most businesses do not realize they can claim the full Section 179 deduction even when equipment is financed through:
- A capital lease
- A $1 buyout lease
- A finance agreement or equipment loan
The deduction applies in the year the equipment is placed in service, not when it is fully paid off. This increases purchasing power and improves ROI.
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Financing & Cash-Flow
- Immediate tax savings often exceed first-year payments
- Lower up-front cost compared to cash purchases
- Predictable monthly payments improve budget control
- Allows companies to acquire more equipment at once
- Preserves capital for labor, projects, and operations
This is one of the most effective strategies for lowering total cost of ownership.
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Importance of financing in equipment acquisition strategies
Recent nationwide surveys across construction, manufacturing, and transportation industries reflect the increasing importance of financing in equipment acquisition strategies.
Equipment Financing Calculator
Our Section 179 & Bonus Depreciation Calculator provides:
- Estimated first-year tax deductions
- Estimated Bonus Depreciation impact
- Adjusted after-tax equipment cost
This tool helps customers understand the real cost of ownership and strengthens the financial case for purchasing now.
Results
*Calculator uses simplified 2025 business-rule Section 179 and Bonus Depreciation thresholds for estimation. It is for informational purposes only and does not constitute tax, legal, or accounting advice. Businesses should consult with their CPA or tax advisor to determine eligibility and how Section 179, Bonus Depreciation, and provisions under the One Big Beautiful Bill (OBBBA) may apply to their specific situation. Credit and equipment restrictions apply.
Industry signals shaping 2025 equipment demand
Market Insights: 2025 Equipment Purchasing Trends
These trends align with increased use of Section 179 and Bonus Depreciation to offset upgrading costs.
Maximize the benefits of Section 179
Commercial Financing Solutions for Dealers, OEMs & End Users
We provide financing programs that help businesses and dealer networks maximize the benefits of Section 179 and Bonus Depreciation.
Financing Options
- Capital leases
- $1 buyouts
- TRAC leases
- FMV structures
- Seasonal and deferred payments
- Dealer & OEM financing programs
- Pre-approvals and fast funding
These solutions support end users and accelerate equipment sales for dealer and OEM partners.
Important Notice
Important Notice
This information is for general understanding only. It is not tax, legal, or accounting advice. Businesses should consult their CPA or tax advisor to confirm eligibility for Section 179, Bonus Depreciation, or benefits under the One Big Beautiful Bill (OBBBA). Credit approval and equipment restrictions may apply.