Section 179: What Changed and What to Do Before Year-End

With the passage of the One Big Beautiful Bill (OBBB) in 2025 delivering changes that make it easier, and far more rewarding, to buy or finance new and used equipment. From 100% bonus depreciation to an expanded Section 179 cap and improved interest deductions, these updates could mean significant tax savings and stronger cash flow for companies planning capital investments.

For many, Section 179 has become a familiar part of year-end planning. If equipment purchases are already on the horizon, Section 179 may provide an opportunity to potentially reduce taxable income while investing in the equipment their business needs to grow and thrive.

Still, every year brings updated limits, changing business goals, and new business owners who may not be familiar with how Section 179 works. That’s why we encourage customers to start planning now before year-end.

If you’ve been waiting to upgrade equipment, now might be the best time to act. Here’s what changed and how your business can take full advantage in 2026:

Bonus Depreciation – Now 100%
Businesses can deduct 100% of the cost of qualifying assets in the first year they’re placed in service. This permanent change means faster write-offs for equipment, machinery, vehicles, technology and other eligible assets, eliminating the wait of long depreciation schedules.
Section 179 Expensing Cap Increase
The Section 179 deduction limit increased to $2,560,000 for 2026, with phase-outs beginning at $4,090,000. This provides more flexibility for businesses making significant equipment purchases, from machinery and vehicles to technology upgrades.
Interest Expense Deduction Enhanced
The law lets businesses deduct more interest on financed equipment by using EBITDA instead of EBIT (because it adds back depreciation and amortization). This improves cash flow and lowers borrowing costs.

How Your Financing Choice Shapes Your Tax Break

Businesses spending under the threshold on qualifying equipment can maximize year-end savings by combining tax deductions with smart equipment financing. Used together, Section 179 and financing let you deduct the full cost of qualifying equipment while only paying a fraction upfront. In many cases the tax savings can exceed the monthly equipment payments, which improves cash flow and frees up capital for growth.

The structure of your deal determines which deductions you can claim.

Financing Brings the Biggest Deduction. In most equipment finance agreements (EFA) structures, you’re treated as the tax owner of the equipment. That generally means you can take Section 179 and bonus depreciation on the full cost of the equipment.
Leasing Spreads the Savings Out. An operating lease works more like a rental, so you usually can’t take Section 179. Instead, you deduct each lease payment as a business expense. It still lowers your taxes, just gradually over the term.

2026 Tax Savings — *This material is for informational purposes only and should not be construed as tax, legal, or accounting advice. Consult your tax advisor regarding your specific situation.*

What It Means for You

With 100% bonus depreciation, higher Section 179 limits, and more generous interest deductions, financing the equipment that fuels your growth has never been smarter. Talk with your tax or financing advisor to make sure you’re positioned to capture every benefit.

Don’t wait: December 31 is the deadline. To qualify for this year’s deduction, you equipment must be delivered, installed, and ready to use by that date. If getting equipment up and running before year-end matters more than when the payments begin, ask about our flexible payment options, which work alongside your tax planning.

Acting before year-end could turn tax savings into real cash flow, helping your business stay competitive and grow faster.

Run the Numbers Yourself

Use our Section 179 calculator to see what you could save based on your tax bracket.

Calculate your savings