See what a purchase is really costing your customer.
Section 179 lets a business write off the full purchase price of qualifying equipment in the year it goes into service. Put a number in below and see the deduction, the estimated tax savings, and the true after-tax cost.
New or used both qualify, as long as the equipment is new to your business.
Pass-through entities (LLC, S corp, sole prop) use the owner's individual rate. Not sure? 24% is a reasonable middle estimate.
Estimates for illustration only, based on 2026 federal limits. Actual deduction depends on taxable income, entity type, business-use percentage, and state rules. Confirm with a CPA.
Three things worth knowing.
Deduct it all at once
Instead of depreciating equipment a little at a time over several years, Section 179 lets a business deduct the entire purchase price in the year the equipment is placed in service. For 2026 the cap is $2,560,000.
Financing still counts
This is the part most buyers miss. A financed purchase earns the same full deduction as a cash purchase. Your customer can put a fraction down and still write off the entire price, which often means a deduction larger than what they spent this year.
Delivered, not just ordered
The equipment has to be in the customer's possession and actually in use by December 31 to count for that tax year. Signed paperwork on a machine that has not shipped does not qualify.
Deduct up to $2,560,000, with the phase-out beginning at $4,090,000. Above the cap, 100% bonus depreciation covers the remaining basis, and it is a permanent part of the tax code now, not a phase-down schedule.
If it is tangible business equipment, it probably counts.
Section 179 covers a wide range of tangible property used in the business more than 50% of the time. A sample of what we finance:
Construction & heavy equipment
Excavators, loaders, crushers, screening plants, attachments.
Material handling
Forklifts, reach trucks, racking, conveyors, dock equipment.
Trucking & transportation
Box trucks, tractors, trailers, lowboys, service bodies.
Medical, dental & vision
Chairs, operatory lights, imaging, OCT, exam lane equipment.
Manufacturing & machine tools
CNC machines, presses, packaging lines, production equipment.
Technology & software
Servers, workstations, networking, off-the-shelf software.
Office equipment & furniture
Desks, seating, copiers, phone systems, conference AV.
Restaurant & food service
Ovens, refrigeration, prep lines, POS systems, smallwares.
Commercial laundry
Washers, dryers, vended equipment, payment systems.
Agriculture & landscaping
Tractors, implements, mowers, chippers, forestry equipment.
Auto repair
Lifts, alignment racks, diagnostic equipment, tire machines.
Audio visual & drones
Production gear, displays, UAV systems, camera packages.
The ones customers actually ask.
Can a business deduct equipment it financed?
Yes. Section 179 applies to the full purchase price regardless of how the equipment was paid for. A customer who finances with 10% down still deducts 100% of the price in the year it is placed in service, which is why the deduction frequently exceeds the cash they actually spent that year.
What is the difference between Section 179 and bonus depreciation?
Section 179 is elective and capped at $2,560,000 for 2026, and it cannot create or increase a net operating loss, so it is limited to taxable income. Bonus depreciation is 100% with no dollar cap and can create a loss. Most businesses take Section 179 first, then apply bonus depreciation to whatever basis is left over.
What is the deadline?
The equipment must be purchased and placed in service by December 31 of the tax year. Placed in service means delivered, installed where required, and ready for its intended use. Ordering in December for January delivery pushes the deduction to the following year.
Does the business need to be profitable?
For Section 179, yes, the deduction is limited to taxable business income and unused amounts carry forward. Bonus depreciation has no such limit and can generate a loss, which is one reason the two are often used together.
What about vehicles?
It depends on the vehicle. Work trucks, box trucks, and heavy equipment over 14,000 lbs GVWR generally qualify for the full deduction. SUVs between 6,000 and 14,000 lbs have a separate capped limit, and passenger vehicles under 6,000 lbs are limited further still. Worth a specific conversation with a CPA.
Is this tax advice?
No. Five West Financial arranges equipment financing, we are not tax professionals. This tool is a planning estimate built on published 2026 federal limits. Every business's situation differs, and the final number belongs to your accountant.
Send it over and we will structure the financing around it. Same-day approvals on most files, and terms built to keep your customer's working capital where it belongs.