What Exactly Is Section 179?

Section 179 is a tax rule that allows small and medium-sized businesses to deduct the full purchase price of qualifying equipment in the same year it’s placed into service. Instead of spreading the deduction out over several years through regular depreciation, you can write off the entire amount upfront.

For operators and contractors who rely on equipment and attachments, this means you can upgrade your fleet and get the tax break right away.

Why It Matters for Equipment and Attachments

Section 179 is built for businesses that depend on machinery—skid steers, excavators, tractors, mini skid steers, and the attachments that keep them productive. If the equipment is used for business and put into service during the tax year, it may qualify.

This immediate deduction can boost your cash flow, making it easier to keep your operation running strong, upgrade older tools, and add attachments that help you get more done.

2025 Section 179 Limits

For tax year 2025, the IRS has increased the limits:

• Maximum Section 179 Deduction: $2,500,000

• Phase-Out Threshold Begins: $4,000,000 in total equipment purchases

• Bonus Depreciation: Restored to 100% for many qualifying assets beginning in 2025

These higher limits mean many businesses can deduct the full cost of their qualifying equipment purchases this year, including new or used attachments.

When Can You Take the Deduction?

You can claim Section 179 when filing your business tax return as long as the equipment is:

• Purchased (or financed/leased) within the tax year, and

• Placed into service by December 31

Most businesses take the deduction through IRS Form 4562, usually with the help of an accountant or tax professional.

What Types of Equipment Qualify?

To qualify, equipment must be used for business more than 50% of the time and placed into service during the tax year. Both new and used equipment are eligible as long as the used item is new to you.

Qualifying equipment includes:

• Skid steer, excavator, and tractor attachments

• Heavy equipment and machinery

• Business vehicles (over 6,000 lbs GVWR)

• Computers and software

• Office furniture and office equipment

If you split business and personal use, your deduction will be based only on the business-use percentage.

Additional Considerations

There are a few rules to keep in mind when planning your equipment purchases:

• The deduction can’t exceed your business’s taxable income.

• Once total equipment purchases exceed $4,000,000, the deduction begins to phase out.

• Section 179 can be combined with bonus depreciation for additional tax savings.

• Bonus depreciation typically applies to new equipment and is taken after Section 179 is applied.

• Proper documentation is important—keep invoices, delivery dates, and proof of business use.

Is There a Deadline?

Yes. To use Section 179 for the 2025 tax year, the equipment must be purchased or financed and placed into service by December 31, 2025.

If you’re planning to add new attachments or replace older machinery, it’s better not to wait until the last minute.

A Simple Real-World Example

If you buy a new attachment for your skid steer for $50,000 and place it into service in 2025, Section 179 may allow you to deduct the full $50,000 that same year.

If your business is in the 24% tax bracket, that deduction could save you around $12,000 in taxes—effectively lowering your net cost to $38,000. That’s money you can put right back into your operation.

Key Numbers to Remember for 2025

• $2,500,000 maximum Section 179 deduction

• $4,000,000 spending cap before phase-out

• 100% bonus depreciation available for many assets

• Equipment must be placed into service by December 31, 2025

Talk to Your Tax Professional

Tax laws change, and every business situation is different. Section 179 can offer major savings, but it’s always wise to review your plans with a qualified tax professional before making a large purchase.

Understanding Section 179 can help you make smarter decisions about upgrading your equipment, improving your operation, and taking advantage of tax benefits available to your business.

Ready to Take Advantage of Section 179?
Find an IronCraft dealer in your area and explore the equipment that qualifies.
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