If you're planning to buy or finance business equipment this year, there's a powerful tax incentive you should know about: the Section 179 tax deduction.
Section 179 allows businesses to deduct the full purchase price of qualifying equipment—whether it’s bought outright or financed—within the same tax year. And with equipment costs rising, these tax savings can significantly offset your investment.
Want to see your potential savings? A Section 179 tax deduction calculator makes it easy to estimate what you could save based on your equipment spend. In this post, we’ll walk you through how the deduction works, who qualifies, and how to use a calculator to plan your next purchase or financing deal.
Section 179 is a U.S. tax code provision designed to encourage small and mid-sized businesses to invest in themselves. It lets you deduct the full cost of qualifying equipment (up to an annual limit) rather than depreciating it over several years.
Let’s say your business finances a new packaging line for $150,000. Here's how the math could work:
|
Step |
Amount |
|
Equipment cost |
$150,000 |
|
Section 179 deduction |
$150,000 |
|
Estimated tax rate (example) |
24% |
|
Estimated tax savings |
$36,000 |
You’d save roughly $36,000 on your tax bill, bringing your net equipment cost to about $114,000.
✅ Tip: Even if you finance the equipment and only make one payment in 2025, you can still deduct the full $150,000 if it’s placed in service that year.
Most small and mid-sized businesses across industries can take advantage of this deduction if they meet a few key criteria:
The equipment must be used for business more than 50% of the time.
💡 Bonus depreciation may also apply for purchases beyond the Section 179 limit.
Yes—and this is a major advantage. Even if you don’t buy the equipment outright, you can still deduct the full cost in the same tax year as long as:
This makes equipment financing even more attractive. You get the gear you need now, preserve working capital, and reduce your tax liability—all at once.
A Section 179 tax deduction calculator is a simple online tool that helps you estimate your tax savings in just a few clicks.
👉 Try our free calculator here: https://info.financialpc.com/section-179-calculator
If you're planning to invest in equipment this year, follow these best practices to get the most from Section 179:
The Section 179 tax deduction gives businesses a powerful incentive to invest, and when paired with financing, it becomes even more valuable.
You get immediate access to the equipment you need while preserving cash flow, and then turn that investment into a substantial tax benefit. It’s a win-win for your balance sheet and your growth strategy.
📞 Ready to Estimate Your Equipment Tax Savings?
Use our Section 179 tax deduction calculator to see how much you could save this year—or connect with our team to build a personalized financing and tax strategy.