Financing

In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).

Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.

And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.

This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2025 tax return (up to $2,500,000).

Section 179 does come with limits – there are caps to the total amount written off ($2,500,000 for 2025), and limits to the total amount of the equipment purchased ($4,000,000 in 2025). The deduction begins to phase out on a dollar-for-dollar basis after this limit is reached by a given business (thus, the entire deduction goes away once $6,500,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.

All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2025 should qualify for the Section 179 Deduction (assuming they spend less than $6,500,000).

Most tangible goods used by American businesses, including “off-the-shelf” software and business-use vehicles (restrictions apply) qualify for the Section 179 Deduction.

For basic guidelines on what property is covered under the Section 179 tax code, please refer to list of Section 179 Qualifying Equipment. Also, to qualify for the Section 179 Deduction, the equipment and/or software purchased or financed must be placed into service between January 1, 2025 and December 31, 2025.