What is Section 179?
Section 179 is a tax rule that helps businesses save money. Instead of waiting years to deduct the cost of new equipment, you can subtract the whole cost from your taxes the same year you buy it. This means you pay less tax right away and keep more money in your pocket.
New for 2025
Starting January 19, 2025, there are new, bigger limits:
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You can deduct up to $2.5 million on equipment bought in 2025.
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Once your equipment spending hits $4 million, the deduction slowly decreases until it goes away completely.
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On top of Section 179, you can also claim 100% bonus depreciation on any equipment costs not fully deducted by Section 179.
What Equipment Qualifies?
These items qualify for Section 179:
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CNC machines and automated equipment like robots
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Software, cutting tools, and conveyors
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Building improvements connected to production (like ventilation or safety systems)
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Used equipment, as long as it's new to your business
What is Bonus Depreciation?
Bonus depreciation is another tax tool that lets you deduct equipment costs quickly. After you apply Section 179, you can use bonus depreciation on any remaining cost. In 2025, bonus depreciation is 100%. That means you can immediately write off the entire leftover cost instead of spreading deductions over several years.
Simple Example of Tax Savings
Here's how it might look if you bought a $250,000 CNC machine:
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Machine Cost: $250,000
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Section 179 Savings: At a 32% tax rate, you save $80,000
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Tariff Cost (25%): $62,500
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Your Net Gain: $17,500 extra after paying tariffs
This shows how powerful Section 179 can be—it helps offset costs like tariffs, giving you more money to run your shop.
Four Easy Steps to Make Section 179 Work for You
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Buy Early: Get equipment ordered and in use before the end of 2025.
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Combine Purchases: Bundle smaller items like tools and software with your larger equipment purchase to maximize your deduction.
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Use Financing: Machinery Finance Resources (MFR) can quickly approve up to $750,000 in financing. This helps you conserve cash.
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Keep Records: Save invoices, delivery receipts, installation dates, and any related paperwork to prove your deduction.
Common Questions
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Can I use Section 179 on used equipment?
Yes, as long as the equipment is new to your shop. -
What happens if I buy more than $4 million worth of equipment?
The deduction starts to shrink dollar-for-dollar after $4 million, eventually disappearing. -
Can I combine Section 179 with bonus depreciation?
Yes, you can first use Section 179, then apply bonus depreciation to any remaining costs.
Next Steps for Your Shop
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Estimate Your Savings: Use our simple worksheet provided by your Morris rep.
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Get a Shop Checkup: Have a Morris Productivity Specialist ensure your space is ready so your equipment can start working immediately.
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Talk Financing: Contact Machinery Finance Resources to set up financing that aligns with your cash flow.
Bottom Line
Using Section 179 in 2025 can significantly lower your taxes, giving you extra money for your business. Planning now can ensure you maximize these savings.
This article is educational only. Always consult your tax advisor for personal advice.