SECTION 179 TAX SAVINGS
Deduct the full cost of business equipment in the year you buy it — not over 5–7 years. For businesses under $5M in revenue, this is one of the most powerful tax tools available.
WHAT IS SECTION 179?
Section 179 is an IRS tax code that lets businesses deduct the full purchase price of qualifying equipment and software in the year it's purchased — instead of depreciating it over many years.
For a small business owner, this means buying a $100,000 piece of equipment could reduce your taxable income by $100,000 this year — saving you real dollars at tax time.
2026 Deduction Limit
$2,560,000
Phase-Out Begins At
$4,090,000
Equipment Must Be
In Service by Dec 31, 2026
Deduction Taken
Year 1 — Not Spread Out
HOW IT WORKS
01
Buy or Finance Equipment
Purchase or finance qualifying business equipment and put it in service before December 31st.
02
Claim the Deduction
Deduct the full purchase price — up to $2,560,000 — from your taxable income on your tax return.
03
Keep the Cash
Your tax bill drops by your deduction × your tax rate. Financed equipment still gets the full deduction.
REAL SAVINGS EXAMPLES
Estimated savings based on typical tax brackets for businesses at each revenue level.
| Annual Revenue | Equipment Cost | Tax Bracket | Est. Tax Savings |
|---|---|---|---|
| $500K | $75,000 | 22% | $16,500 |
| $1.5M | $150,000 | 24% | $36,000 |
| $3M | $300,000 | 32% | $96,000 |
| $5M | $500,000 | 35% | $175,000 |
* Examples are for illustrative purposes only. Consult a tax professional for advice specific to your business.
FINANCE IT. DEDUCT IT. KEEP YOUR CASH.
The best of both worlds — preserve cash flow AND reduce your tax bill.
Finance $150,000 in equipment with a low monthly payment
Deduct the full $150,000 from your taxable income this year
Save ~$36,000–$52,500 in taxes (at 24–35% bracket)
Your tax savings alone may cover 6–12 months of payments
Quick Example
COMMON QUESTIONS
Does my business qualify?
Most U.S. businesses that purchase, finance, or lease equipment and put it in service during the tax year qualify. There is no minimum revenue requirement. The equipment must be used for business purposes more than 50% of the time.
Does financed equipment qualify?
Yes — this is one of the biggest advantages. You can deduct the full purchase price of financed equipment even though you only made a down payment. You get the full tax deduction while keeping cash in your business.
What types of equipment qualify?
Most tangible business property qualifies — machinery, vehicles (with limits), computers, tools, office furniture, and more. Software used in business also often qualifies. Personal property and real estate do not.
Is there a deduction limit?
For 2026, the Section 179 deduction limit is $2,560,000. The phase-out begins at $4,090,000 in total equipment purchases. Businesses can deduct the full purchase price of new or used equipment, including vehicles over 6,000 lbs, purchased and placed in service by Dec. 31, 2026.
Can I combine Section 179 with equipment financing?
Absolutely — and it's often the smartest move. Finance your equipment to preserve cash flow, then deduct the full cost on your taxes in year one. Your tax savings can effectively offset months of payments.
When does the equipment need to be purchased?
Equipment must be purchased AND placed in service (put to use) before December 31, 2026 to claim the deduction for the 2026 tax year. Don't wait until the last minute to arrange financing.
Section 179 information is provided for general educational purposes only and does not constitute tax or legal advice. Rules, limits, and eligibility may change. Always consult a qualified CPA or tax advisor before making tax decisions.
READY TO TAKE ADVANTAGE?
Forge Equipment Funding can help you get the equipment you need with financing structured to maximize your Section 179 benefit.