Summary
If you’re in the market for a new piece of equipment for your business, now is the time to make moves that could improve your tax situation. Section 179 of the IRS tax code remains one of the most valuable tax incentives available to small businesses.
What is Section 179?
Section 179 lets businesses deduct the entire purchase price of qualifying new or used equipment in the year it’s placed into service.
That’s excellent news if you’ve already purchased, or plan to acquire a Bobcat® machine (or other major equipment) this year.
Originally created to deliver tax relief for small businesses, Section 179 has been included in several stimulus acts and tax reforms over time. While large companies often combine Section 179 with bonus depreciation strategies, this deduction remains a powerful tool particularly for small and medium-sized businesses.
What’s New for 2025?
Each year, Section 179 and bonus depreciation limits are adjusted, giving businesses fresh opportunities to reduce their tax burden.
Higher Deduction Limit:
- For tax year 2025, the Section 179 deduction limit has increased to $2,500,000, with a total equipment purchase cap of $4,000,000 before the deduction begins to phase out.
100% Bonus Depreciation:
- Businesses can continue to deduct 100% of the cost of eligible new and used equipment in the first year it’s placed into service.
What About Previous Year Purchases?
If you purchased and placed qualifying equipment into service in a prior tax year, you may still be able to benefit. Certain tax situations—such as carryovers from unused deductions or fiscal year filing differences—can allow you to apply Section 179 or bonus depreciation rules from the previous year.
That’s why it’s important to talk with your tax advisor. They can help determine whether you should use current-year rules, prior-year provisions, or a combination of both to maximize your savings.
How Section 179 Works
In the past, equipment purchases were deducted a small amount each year through depreciation. Section 179 changes that by allowing you to deduct the full cost immediately.
Write it off now:
- Deduct the entire purchase price in the year of purchase.
Annual limit:
- Up to $2,500,000 in 2025.
Phase-out cap:
- Deduction begins to phase out once $4,000,000 in purchases is reached.
This makes Section 179 a true tax incentive for small and mid-sized businesses.
Note: The deduction can’t exceed your taxable income for the year. If your purchase is greater than the allowable amount, you may be able to carry the excess forward. Keep in mind: accelerated depreciation may be subject to recapture if equipment is sold or disposed of later. Consult your legal or tax advisor for information related to your specific situation.
What Bobcat Equipment Qualifies for Deduction?
Most Bobcat equipment qualifies for Section 179 as long as it’s used more than 50% of the time for business purposes. That means whether you’re running a construction crew, managing a farm, or operating a small business, the machines and attachments you rely on can often be deducted in the same year they’re put to work. From loaders and excavators to tractors, UTVs and mowers, Bobcat equipment used primarily for business is eligible for this valuable tax incentive.
Examples of eligible Bobcat equipment include:
- Compact Track Loaders – Versatile, all-terrain performance.
- Skid-Steer Loaders – Compact, maneuverable, and tough.
- Mini Track Loaders – Big productivity in a small footprint.
- Compact Wheel Loaders – Efficient material handling power.
- Small Articulated Loaders – Light on turf, heavy on productivity.
- Excavators – Compact and larger models for digging, lifting, and more.
- Telehandlers – Reach, lift, and transport with ease.
- Compact and Utility Tractors – Ready for chores, fields, and property projects.
- Utility Vehicles (UTVs) – Move tools, people, and materials across your jobsite or acreage.
- Mowers – Zero-turn, stand-on, and walk-behind models for lawn care professionals.
- Attachments and Implements – Augers, grapples, snow blowers, soil conditioners, trenchers, and more.
For a full list of current requirements and limitations, visit the IRS website and consult a tax advisor.
Who Qualifies?
All businesses that purchase or finance new or used business equipment during tax year 2025 will qualify.
- Equipment must be used for business purposes at least 50% of the time.
- Equipment must be placed into service between January 1 and December 31, 2025.
- To calculate the eligible deduction, multiply the equipment cost by the percentage of business use.
Simply put, if your Bobcat machine is being put to work for business, it’s likely eligible. Taking the deduction now means you can free up cash flow today and reinvest in the projects that move your business forward.
Section 179 vs. Bonus Depreciation
Bonus depreciation is another tax incentive that often works alongside Section 179. It allows businesses to deduct a percentage of the cost of eligible equipment in the first year it’s placed into service, rather than spreading the deduction over time. For 2025, it’s available at 100%.
Here’s how they compare:
Section 179
- Applies to new equipment and used equipment (as long as that used equipment is new to you). Deduction limit of $2,500,000, with a $4,000,000 phase-out.
Bonus Depreciation
- Historically applied to new equipment only, but now covers used equipment as well. Useful for larger businesses that exceed the Section 179 cap ($4,000,000) or for businesses operating at a net loss.
When filing, Section 179 is generally applied first, followed by bonus depreciation. However, if your business has no taxable profit, Section 179 may not apply; in that case, bonus depreciation can still be used, and any resulting loss may be carried forward to future years.
