Do you want to add to your fleet or cut a check to Uncle sam
It’s Time To Think Taxes To Save
Even though the end of the year may sound like it is a long way off, right now is the time to be thinking about your taxes. You can either write a check to Uncle Sam or buy equipment. If you have been on the fence about adding to your fleet or arsenal, the IRS Section 179 deduction is something construction, contractors, and landscaping companies should begin considering right now.
What is IRS Section 179 Tax Deduction?
Section 179 of the Internal Revenue Code empowers businesses to deduct the full purchase price of qualifying equipment and software in the same tax year they’re put into service. Instead of stretching depreciation across several years, you can claim the entire cost upfront—dramatically improving your cash flow and creating immediate tax benefits.
Why Section 179 Matters for Your Business
Immediate Tax Impact: Rather than waiting years for depreciation benefits, claim the full deduction in 2025.
Enhanced Cash Flow: Keep more working capital in your business when you need it most.
Strategic Growth: Upgrade equipment sooner and maintain competitive advantages in your market
What Is the Maximum Section 179 Deduction for 2025?
This year the code has changed and is much better. This is now a permeant tax benefit signed into law via the BBB (Big Beautiful Bill), previous years it was set to expire so we would use that to create sense of urgency, but now its permanent tax code. 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 $4,000,000:
- Dollar-for-dollar reduction above $4,000,000:
- Complete phase-out at $6,500,000
- Additional purchases may still qualify for bonus depreciation
How Does Section 179 Apply to Business Vehicles?
Special rules apply to vehicles:
- Vehicles rated at 6,000 lbs. GVWR or less follow standard depreciation rules
- SUVs over 6,000 lbs. GVWR but under 14,000 lbs. GVWR: Limited to $31,300 Section 179 deduction
- Vehicles over 6,000 lbs. GVWR such as heavy work trucks and vans may be eligible for full Section 179 expensing
- Vehicles with beds at least six feet long are not subject to the SUV limitation
Learn more about Section 179 Vehicle Deductions
Which Assets Qualify for Section 179 in 2025?
- Common Eligible Assets
- Manufacturing equipment and machinery
- Business vehicles
- Computers and office technology
- Off-the-shelf software
- Office furniture and equipment
- Certain building improvements
What Are the Requirements for Qualifying Property?
- Must be primarily for business use (>50%)
- New or used equipment qualifies
- Must be placed in service by December 31, 2025
- Cannot be inherited or gifted property
How Does Section 179 Compare to Bonus Depreciation in 2025?
- Section 179: $2,500,000 maximum with business income limitation
- Bonus Depreciation: 100% with no income limit
- Optimal Strategy: Often involves combining both for maximum tax benefit
How Do I Make the Section 179 Election in 2025?
File Form 4562 with your tax return:
- List qualifying property
- Specify amount to expense
- Include business-use percentage
- Document vehicle information if applicable
Where Can I Find Additional Resources?
For all the information you need to evaluate and identify which equipment qualifies, follow the link below.
Every business and situation is different. We advise that you consult in depth with your financial advisors and find out what is the best solution and strategy to take with your particular business. Right now, Sound Heavy Machinery has the best values of the season on almost all equipment so our customers can take advantage of this new tax law. It’s what good partners do. Helping each other to make SOUND decisions.
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More information on all the Sound Heavy Machinery products and services can be found on www.SoundHM.com or by calling (910) 782-2477.