For many business owners, the end of the year is an opportunity to review expenses, plan for the year ahead, and consider investments that could improve business performance. If your business needs a new bucket truck, wood chipper, skid steer, excavator, dump truck, or other equipment, November is a smart time to start exploring your options.
One tax provision worth discussing with your accountant is Section 179, which may allow eligible businesses to deduct the cost of qualifying equipment in the year it is placed in service rather than spreading the deduction over several years.
Depending on your circumstances, this deduction could significantly reduce your taxable business income. And because financing may be available for qualifying equipment purchases, you may not need to pay the entire purchase price upfront to move forward.
What Is Section 179?
Section 179 is a provision in the U.S. tax code that allows businesses to elect to deduct the cost of certain qualifying business equipment in the year the equipment is placed in service.
Normally, businesses recover the cost of many long-term assets through depreciation deductions over time. Section 179 can allow eligible businesses to deduct some or all of the qualifying purchase cost sooner, subject to applicable limits and requirements.
For the 2026 tax year, the general maximum Section 179 deduction is $2.56 million, with a phaseout beginning when total qualifying property placed in service exceeds $4.09 million. Additional restrictions and eligibility requirements apply.
Section 179 may apply to various types of business equipment, including qualifying machinery, work vehicles, and other equipment used in a trade or business. Used equipment can also qualify when it meets the applicable requirements.
For businesses that depend on reliable equipment to serve customers, complete jobs, and generate revenue, this tax provision may make an already-planned purchase more attractive.
How Much Could Section 179 Save Your Business?
The potential savings can be substantial, but it is important to understand what the deduction actually does.
Section 179 reduces taxable income; it does not directly reduce your tax bill dollar for dollar. Your actual tax savings depend on your tax rate, business structure, income, eligibility, and other factors.
Here is a simplified example.
Imagine your business purchases a qualifying piece of equipment for $100,000 and is eligible to deduct the full amount under Section 179.
| Example | Amount |
|---|---|
| Qualifying equipment purchase | $100,000 |
| Potential deduction | $100,000 |
| Illustrative tax rate | 25% |
| Potential tax savings | $25,000 |
| Effective cost after illustrative tax savings | $75,000 |
In this example, a $100,000 deduction could reduce the business's tax liability by $25,000, assuming the full deduction is usable and the illustrative 25% rate applies.
The equipment still costs $100,000. The potential $25,000 represents estimated tax savings, not a discount from the equipment seller or an automatic refund.
Your actual results could be higher or lower. Your tax professional can help determine the deduction available to your business and how it affects your federal and state taxes.
What If You Need More Than One Piece of Equipment?
Section 179 can be especially worth exploring for businesses planning multiple equipment purchases.
For example, a tree care company may need a bucket truck and wood chipper to expand its crew's capabilities. A landscaping company might be considering a skid steer and dump trailer. A construction company may need an excavator or other heavy equipment to take on additional projects.
If these purchases qualify, the deductions could add up.
Consider a hypothetical business purchasing $200,000 in qualifying equipment. If the business can deduct the full amount and has an applicable 25% tax rate, the illustrative tax savings would be $50,000.
That does not mean every business will receive that result. Income limitations, business-use requirements, other deductions, and the rules governing depreciation can affect the final outcome.
The important takeaway is to evaluate equipment needs and tax planning together rather than waiting until the last few days of the year.
Can You Finance Equipment and Still Benefit From Section 179?
Financing may allow your business to preserve working capital while investing in the equipment it needs.
Eligible equipment acquired through financing may qualify for a deduction based on the purchase cost, rather than only the amount of cash paid upfront. The details depend on the transaction, the equipment, and the applicable tax rules.
For example, imagine a business finances a qualifying $100,000 piece of equipment instead of paying $100,000 in cash.
If the business qualifies to deduct the full $100,000 purchase price, the potential deduction may be the same as it would be for an eligible cash purchase. Financing does not automatically prevent the deduction.
However, the loan balance does not disappear because of a tax deduction. The business remains responsible for its financing payments, and interest, fees, and other costs affect the overall economics of the purchase.
This is why it is important to look at both sides of the decision:
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Tax planning: What deductions might be available?
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Cash flow: Can the business comfortably manage the monthly payments?
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Business needs: Will the equipment improve productivity, capacity, or profitability?
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Timing: Can the equipment be acquired and placed in service within the required timeframe?
At First Financial LLC, we help businesses explore financing options for new and used equipment so they can evaluate purchases while considering their working capital needs.
What Types of Equipment Should You Consider?
If you are already planning to upgrade equipment or expand your business, now is a good time to identify what you need.
Depending on your industry and the equipment's eligibility, purchases worth discussing with your tax professional may include:
Tree care and arborist equipment
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Bucket trucks and aerial lift trucks
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Wood chippers
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Stump grinders
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Log trailers and dump trailers
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Skid steers and other supporting equipment
Landscaping equipment
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Skid steers and compact track loaders
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Commercial mowers
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Excavators
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Dump trucks and trailers
Construction and heavy equipment
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Excavators
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Bulldozers
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Wheel loaders
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Forklifts
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Other qualifying machinery and equipment
Commercial trucks and work vehicles
Certain trucks and work vehicles may qualify, depending on their design, business use, and applicable tax rules. Not every vehicle qualifies for the same treatment, so confirm the details before making a purchase.
Whether you are replacing aging equipment or adding another machine to your fleet, a planned purchase may offer operational benefits as well as potential tax advantages.
Why November Is the Time to Start Shopping
If you want to explore a potential 2026 deduction, waiting until December could leave you with very little time to find the right equipment, arrange financing, and complete the transaction.
For most qualifying property, the equipment must be placed in service by December 31, 2026 to qualify for a deduction in the 2026 tax year. Placed in service generally means the equipment is ready and available for its intended business use. Simply placing an order or making a deposit may not be sufficient.
Starting in November gives you time to:
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Identify the equipment your business needs.
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Compare available equipment and sellers.
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Explore financing options and understand the payment obligations.
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Coordinate delivery, installation, or setup as needed.
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Confirm the transaction and timing requirements with your tax professional.
Year-end deadlines can create pressure for both buyers and sellers. Getting started early gives you more time to make an informed decision instead of rushing into a purchase that may not fit your business.
Section 179 and Bonus Depreciation: What Is the Difference?
Section 179 is not the only tax provision that may allow a business to deduct equipment costs sooner.
Bonus depreciation is another provision that can allow eligible businesses to deduct a substantial portion—or potentially all—of the cost of certain qualifying property in the first year. Under current federal rules, 100% bonus depreciation is available for qualifying property acquired and placed in service after January 19, 2025, subject to applicable requirements.
The rules for Section 179 and bonus depreciation are different, and the most appropriate treatment depends on the business's situation. Your accountant can help determine which deductions may apply and how to coordinate them.
Rather than assuming that every equipment purchase receives the same tax treatment, get professional guidance before finalizing your purchase.
Make Your Next Equipment Purchase Part of Your Year-End Plan
The end of the year can be a practical time to evaluate equipment purchases you were already considering. Section 179 may offer meaningful tax benefits for eligible businesses, while financing can provide another way to manage the upfront cost of an equipment investment.
The best approach is to start early, focus on equipment that supports your business goals, and understand the tax and financing implications before committing.
Looking for equipment financing before the end of 2026?
First Financial LLC specializes in equipment financing and leasing, including financing for many types of new and used equipment. Whether you are shopping for a bucket truck, wood chipper, skid steer, excavator, trailer, or other business equipment, we can help you explore your financing options.
Don't wait until December to start the conversation.
Contact First Financial LLC Today
📞 (866) 634-7786
First Financial LLC
Equipment Financing & Leasing Specialist
Fast approvals. Flexible financing. Built to help your business grow.
First Financial LLC to discuss your equipment financing needs.
Tax disclaimer: This article is for general informational and marketing purposes only and is not tax, legal, or accounting advice. Section 179 and bonus depreciation eligibility, deduction limits, business-income limitations, placed-in-service requirements, vehicle restrictions, and other rules may apply. Tax treatment depends on individual circumstances and current law. Consult a qualified tax professional before making an equipment purchase based on anticipated tax benefits.
