Section 179 in 2025: What’s Eligible—and How to Know if You Qualify
If you’re planning to acquire equipment this year, Section 179 can turn that investment into immediate tax savings. Instead of depreciating gear over several years, Section 179 lets many small and mid-sized businesses expense up to $1,250,000 of qualifying purchases placed in service during tax year 2025, with the deduction phasing out once total qualifying purchases exceed $3,130,000. SUVs have a separate 2025 cap of $31,300.
Below, we break down eligibility, what equipment qualifies, and how to pair Section 179 with financing to keep cash flow strong.
Quick eligibility checklist
To use Section 179 in 2025, make sure you can check these boxes:
Business use: The asset is used in your trade or business (not just to produce investment income).
Purchased for business: You acquired the property by purchase (not by gift/inheritance) and not from a related party.
Placed in service in 2025: You’re using it in your business within the tax year you claim the deduction (for most calendar-year filers, by December 31, 2025).
Income limit & phase-out: Your deduction is limited to your taxable business income, and the overall limit begins to phase out after $3,130,000 in total qualifying purchases.
What equipment is eligible in 2025?
In general, tangible personal property used in business qualifies—plus some important categories of software and building improvements:
Machinery & equipment (manufacturing, fabrication, CNC, printing, packaging, medical/diagnostic equipment, restaurant/kitchen equipment, construction gear, transportation equipment, etc.).
Computers, servers, peripherals & office equipment (including copiers, telecom systems).
Off-the-shelf software (non-custom, licensed to the public, not substantially modified). (
Qualified improvement property (QIP)—interior improvements to nonresidential buildings (excluding enlargements, elevators/escalators, structural framework).
Specific nonresidential building improvements:
Roofs
HVAC (heating, ventilation, air conditioning)
Fire protection & alarm systems
Security systems
What does not qualify?
Land and land improvements (parking lots, fences, bridges, docks, etc.).
Property used primarily outside the U.S., certain leased property by noncorporate lessors, and property used by certain tax-exempt or governmental entities.
Property acquired from related parties (e.g., certain family members or controlled entities).
Keep records: You must be able to substantiate the purchase, when it was placed in service, and business use. You elect Section 179 by completing Part I of IRS Form 4562 with your return.
How Section 179 pairs with financing
Section 179 and equipment financing work beautifully together: you can deduct up to the full cost in 2025 while making manageable monthly payments over time. That combination lowers current-year taxes and preserves cash for operations and growth.
SLIM Capital structures term lengths, seasonal payments, and balloon options to match your cash flows—so you can get the tax benefit now and keep liquidity for payroll, inventory, and expansion.
Bonus depreciation in 2025 (how it fits with Section 179)
Section 179 isn’t the only accelerated write-off tool. Bonus depreciation lets you deduct a large portion (often all) of the remaining cost that wasn’t expensed under Section 179. For 2025, recent legislation changed bonus depreciation rules—many assets acquired after Jan. 19/20, 2025 are again eligible for 100% bonus, while assets acquired before that date generally fall under lower 2025 percentages. The right mix (Section 179 first, bonus second) depends on your asset type, timing, and tax situation—coordinate with your CPA.
Industry examples (what our clients often write off)
Construction & trades: skid steers, excavators, compressors, service trucks, GPS/laser systems, scaffolding, specialty tools, and shop equipment.
Restaurants: ovens, ranges, hoods, refrigeration, POS systems, seating, and QIP interior buildouts.
Manufacturing/industrial: CNC machines, lathes, robotics, conveyors, forklifts, air compressors, quality/test equipment, and plant HVAC.
Transportation & logistics: box trucks, trailers, material-handling equipment, telematics, and warehouse racking.
2025 numbers at a glance
Maximum Section 179 deduction: $1,250,000
Phase-out threshold: $3,130,000 (dollar-for-dollar reduction above this)
SUV Section 179 cap: $31,300
Final tips
Place in service by year-end: Ordering isn’t enough; make sure the asset is installed and ready for use in 2025.
Maintain >50% business use for “listed property” (like passenger autos) or face recapture; document miles/hours and business purpose.
Coordinate with your CPA: Section 179 interacts with taxable income limits, bonus depreciation, state rules, and AMT considerations.
Ready to move?
SLIM Capital can pre-qualify your business and structure financing that lines up with your Section 179 strategy—so you get the equipment you need and the potential tax savings you want. Reach out and our team will run side-by-side payment and tax-benefit scenarios for your 2025 purchases.
This post is for general information only and isn’t tax advice. Always consult your tax advisor about your specific situation.
