Why Section 179 and Bonus Depreciation Make Year-End Equipment Purchases Smarter
Understanding Section 179 and Bonus Depreciation Before Year-End
As the year comes to a close, many companies in the construction, lumber, and logistics sectors are reviewing their budgets and planning their next steps for 2026. One key consideration often overlooked is how tax rules like Section 179 and Bonus Depreciation can directly impact equipment purchases made before December 31.
What Is Section 179 Depreciation?
Section 179 allows businesses in the United States to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. Instead of depreciating an asset’s cost over several years, you can deduct up to $1,220,000 (for 2025 limits) in the same year the equipment is placed in service.
This incentive was designed to help small and mid-sized businesses invest in their growth without being slowed down by long depreciation schedules. It applies to both new and used equipment, including forklifts, handlers, cranes, and other heavy machinery commonly used in industrial operations.
What About 100% Bonus Depreciation?
Bonus Depreciation works alongside Section 179. For eligible assets placed in service before the end of 2025, businesses can still claim 100% Bonus Depreciation, meaning the entire cost of qualifying used equipment can be deducted in the first year. After 2025, this percentage is expected to phase down, making this period particularly strategic for capital investments.
How This Impacts Equipment Decisions
For many companies, this means that buying reliable used equipment before December 31 can lead to significant tax advantages.
Heavy equipment such as forklifts, loaders, or port equipment purchased now could not only improve daily operations but also provide meaningful year-end tax relief.
A Practical Perspective
At JYC Equipment, we’ve seen how smart equipment planning helps companies manage both their operational needs and financial efficiency. Understanding depreciation rules allows you to make informed decisions—not just about what you need today, but how to strengthen your business position for the coming year.
If your company is considering an equipment purchase before the year closes, it’s worth consulting with your tax advisor about how Section 179 and Bonus Depreciation apply to your situation. These incentives were designed to support businesses like yours, and timing can make all the difference.