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Maximizing Your Tax Savings: A Guide to the Section 179 Deduction for Your Tractor and Equipment Purchases

Sep. 2 2025 Buying Equipment By Granbury Tractor

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Section 179: A 2025 Guide for Businesses


Are you considering purchasing new equipment for your operation? The Section 179 tax deduction can be a powerful tool to reduce your tax liability and make that purchase more affordable. This tax incentive allows businesses to deduct the full purchase price of qualifying new or used equipment, as long as it is new to your business.

For the 2025 tax year, the Section 179 deduction limits have increased, providing even greater opportunities for savings:

  • Deduction Limit: The maximum amount you can deduct is now $1,250,000.

  • Capital Purchase Limit: The total amount of equipment purchased that qualifies for the deduction is capped at $3,130,000.


What Qualifies?


In addition to agricultural equipment, a wide range of other items may be eligible for the deduction, including:

  • Tractors

  • Construction equipment

  • Attachments


The Role of Bonus Depreciation


Bonus depreciation is a separate tax deduction that can be used in addition to Section 179. It comes into play after the Section 179 spending cap is met. It's important to note that for 2025, bonus depreciation is phasing down to 40%, from 60% in 2024. It will continue to decrease in the following years.


Before making any large capital purchases, it's crucial to consult with a tax advisor. They can help you understand how these deductions apply to your specific financial situation and ensure you make the best decision for your long-term success.