This article was updated on 9/8/20205 to reflect the section 179 limit changes from the One Big Beautiful Bill Act.
Business owners, are you looking to make the most of your tax deductions for 2025 and add equipment at the same time? If you purchase or finance equipment this year, your business may be able to deduct the full purchase price the first year you acquire it using code Section 179 tax deduction.
- Dive into Section 179 on The Equipment Financing Navigator
- What is the Section 179 Deduction?
- Section 179 Deduction Limit for 2025
- Calculate Your Potential 2025 Tax Savings Now
- Requirements to Qualify for the Section 179 Deduction
- Maximize Financial Benefits with Section 179 and Equipment Financing
- Take Action Sooner Than Later
Dive into Section 179 on The Equipment Financing Navigator
What is the Section 179 Deduction?
Section 179 is a tax provision by the Internal Revenue Service (IRS) that enables businesses to deduct the entire cost of qualifying equipment in the year of purchase and put to use.
How Do Section 179 Deductions Aid Small Businesses
Rather than depreciate it over several years, business owners can take an immediate deduction that provides a substantial boost to their cash flow and enables them to reinvest the cash into their business.
Section 179 Deduction Limit for 2025
For the year 2025, the Section 179 deduction limit has been set at $2,500,000, an increase of $1,280,000 from the previous year. Additionally, the phase-out threshold begins at $4,380,000. This means you can deduct the full cost of eligible equipment up to this limit, making it an excellent opportunity for businesses planning significant capital investments.
2025 Deduction Limit vs. Prior Years
| Year |
Deduction Limit |
Change % |
Change $ |
| 2025 |
$2,500,000 |
+104.91% |
$1,280,000 |
| 2024 |
$1,220,000 |
+5.17% |
$60,000 |
| 2023 |
$1,160,000 |
+7.40% |
$80,000 |
| 2022 |
$1,080,000 |
+2.85% |
$30,000 |
| 2021 |
$1,050,000 |
|
|
Calculate Your Potential 2025 Tax Savings Now
Estimating your potential tax savings for 2025 is straightforward with a Section 179 calculator. This free tool lets you enter the cost of your financed equipment and quickly see how much you can save on your income taxes for it.
CALCULATE MY SECTION 179 TAX SAVINGS
Requirements to Qualify for the Section 179 Deduction
To qualify for the Section 179 deduction in 2025, your equipment must meet the following criteria:
- Equipment must be purchased and in use before December 31, 2025.
- Both new and used equipment are eligible, including heavy-duty equipment like tow trucks, boom trucks, septic pumper trucks, screen printing and embroidery machines, and landscaping equipment such as skid steers, compact track loaders, mini excavators, wood chippers, and forestry bucket trucks.
- You must use the equipment for business purposes for at least 50% of the time.
Remember to consult a tax professional before purchasing equipment
Remember: It is important to consult with your certified public accountant (CPA) or tax professional to ensure that your equipment qualifies for the deduction and to maximize your tax benefits.
Maximize Financial Benefits with Section 179 and Equipment Financing
Combining equipment financing with the Section 179 deduction can further enhance your financial strategy.
Here are some key advantages:
- Optimize your cash flow: Spread the cost of your equipment over time while still benefiting from a full tax deduction in the first year.
- Expedite your income tax advantages: Reduce your taxable income immediately, allowing you to retain more cash for your business needs.
- Preserve cash and credit lines: Maintain liquidity and keep credit lines open for future growth and expansion.
- Clear monthly expenditures: Understand your monthly equipment costs and plan your budget accordingly.
Take Action Sooner Than Later
Don't miss the opportunity to take advantage of the Section 179 deduction for 2025. Start planning your equipment purchases early to ensure you meet the eligibility requirements and maximize your tax savings. By investing in your business with the right equipment financing partner and leveraging this valuable tax deduction, you can set the stage for a prosperous year.
GET STARTED TODAY
Remember: To take advantage of Section 179, your equipment must be purchased and in use by December 31st, 2025. If the equipment you need has a long delivery time, plan ahead to ensure it arrives and is operational before the deadline.
As the leader in equipment financing, Beacon Funding is ready to help you acquire the needed equipment with low monthly payments.