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Maximize Equipment Savings in 2025 with Section 179 & Bonus Depreciation

Maximize Your Equipment Investment: Section 179 & Bonus

Depreciation Explained

If your business is buying equipment, excavators, skid steers, dump trucks or attachments, today’s tax rules can make that purchase more affordable than it looks on the invoice. Two powerful tools, Section 179 and bonus depreciation, let qualifying businesses deduct much (or all) of the cost of new or used equipment in the year it’s placed in service.

A newly passed federal update, nicknamed the “Big Beautiful Bill”, significantly expanded Section 179, giving businesses the ability to write off more equipment costs upfront. That means stronger cash flow, bigger tax savings, and more flexibility when building out your fleet.

Here’s what’s new and how Mid Country Machinery can help you make the most of these changes.

What’s New for 2025?

For 2025:

Maximum Section 179 deduction: $2.5 million
Phase-out threshold: begins when total qualifying purchases exceed $4 million

This means that if your total Section 179-eligible equipment purchases for the year go over $4 million, your maximum deduction starts to decrease dollar-for-dollar until it reaches zero at $6.5 million in total purchases.

Additionally, 100% bonus depreciation has returned for qualifying property acquired and placed in service after January 19, 2025, giving businesses the option to deduct the entire cost of eligible equipment in the year it’s placed into service, even beyond the Section 179 limit.

Section 179 vs Bonus Depreciation

Section 179

Allows you to expense qualifying property up to the annual dollar limit ($2.5M for 2025)
Limited to your business’s net taxable income, your Section 179 deduction cannot exceed the income your business earns.
- However, if your Section 179 election exceeds your taxable business income in a given year, you can choose a partial election. Any unused portion carries forward to subsequent tax years, allowing you to apply it once you have sufficient income. This ensures you never lose the benefit.
Must be used more than 50% for business
Phase-out begins after $4M in total purchases
Applies to new and used equipment that’s new to your business

Bonus Depreciation

100% first-year depreciation allowance
Applies automatically, unless you elect out
No income limit, you can deduct the full cost regardless of your taxable income
Allows a 100% deduction for qualifying property acquired and placed in service after January 19, 2025

Optimal Strategy

Many businesses achieve the maximum tax benefit by combining Section 179 and bonus depreciation: use Section 179 first (up to your income and the $2.5M limit), then apply bonus depreciation to the remaining cost of the asset.

Who Benefits Most?

These tax incentives are especially valuable for:

Small and mid-sized businesses wanting to reduce taxable income the same year they invest in equipment.
Companies purchasing several qualifying machines but staying under the Section 179 phase-out threshold.
Businesses making large capital investments that exceed Section 179 limits, where bonus depreciation picks up the rest.

What Qualifies?

Most of the equipment we sell at Mid Country Machinery qualifies for both Section 179 and bonus depreciation, including:

Excavators, Articulated Haulers, Wheel Loaders, Pavers, and Dumpers
Portable power and site prep solutions
Attachments, technology upgrades, and accessories
Business-use software and tools

Practical Example: How Much Could You Save on a HITACHI ZW80-5B?

Let’s say your business purchases a 2023 HITACHI ZW80-5B for $93,000 and places it in service during 2025. Under current rules, this machine may qualify for a 100% first-year deduction through Section 179 or bonus depreciation.

Here’s what that could look like in real dollars:

Purchase price: $93,000 - Potential first-year deduction: $93,000

Assuming a 25% tax bracket (typical for small to medium-sized businesses), your potential tax savings look like this:

$93,000 × 25% = $23,250 in federal tax savings

That’s a significant reduction to your net equipment cost, and real cash your business keeps in year one.

*Actual savings depend on your tax structure, income, state rules, and placed-in-service timing, so be sure to confirm details with your CPA.

How to Claim These Deductions for Your Mid Country Machinery Purchase

To take advantage of Section 179 or bonus depreciation:

Purchase and place your equipment into service by December 31 of the tax year.
Ensure the equipment is used for business purposes more than 50% of the time.
Keep clear documentation:

- Invoice or bill of sale
- Purchase date
- Placed-in-service date
- Equipment cost
- Description of how/where it’s used

File IRS Form 4562 to claim Section 179 and/or bonus depreciation.
Bonus depreciation is applied automatically unless you opt out.

Tax rules are complex, and the right strategy depends on your business structure and timing. It's highly recommended to consult with a tax professional to ensure accurate filing and to maximize your benefit from this deduction.

Bottom Line

Whether you’re preparing for growth, replacing worn-out machines, or planning bigger upgrades, Mid Country Machinery is here to help you make fleet investments that pay off, both on the jobsite and on your balance sheet.

With expanded tax incentives and a full lineup of reliable equipment, there’s never been a better time to upgrade your fleet.

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Disclaimer

The information in this document is for example purposes only. Mid Country Machinery, including its owners, agents, employees, affiliates, suppliers, and partners, is not tax advisor. This document is not intended to offer tax advice. Please consult a qualified tax professional regarding your specific situation.