Here’s How Section 179 works:

In the past, when businesses bought qualifying equipment, they would write it off gradually over time through depreciation. For example, if a company spent $50,000 on a machine, it could write off $10,000 per year for five years.

However, most business owners would prefer to write off the entire purchase price in the year they buy the equipment. Section 179 allows businesses to do just that, allowing them to write off the entire purchase price of qualifying equipment for the current tax year.

Section 179 Tax Benefits Explained by First Western Equipment Finance

Section 179

  • What Is the Maximum Section 179 Deduction for 2025?

    For 2025, businesses can deduct up to $2,500,000 in qualifying purchases. This represents the total amount you can write off immediately, provided your equipment meets these key criteria:

    • Placed in service during the 2025 tax year
    • Used for business purposes more than 50% of the time
    • Qualifies under IRS guidelines

  • Spending Cap and Phase-Out Rules

    The Section 179 deduction begins to phase out when your equipment purchases exceed $3,130,000:

    • Dollar-for-dollar reduction above $3,130,000
    • Complete phase-out at $4,380,000
    • Additional purchases may still qualify for bonus depreciation

  • You should always consult with your qualified accountant when it comes to your specific business tax deductions. Additional information on business taxes and Section 179 can be found at www.irs.gov.