Section 179 for construction equipment
Quick answer
Section 179 lets you deduct the full purchase price of qualifying construction equipment in the year you put it to work — even when you financed it. That means you can put a fraction down, finance the rest, and still write off the entire cost that year.
Used equipment new to your business qualifies too. Annual limits apply, so confirm the current numbers with your accountant.
This is the part of equipment financing that quietly pays for itself, and a surprising number of contractors leave it on the table.
The key detail almost everyone misses is that financing doesn't disqualify the deduction. You can deduct the whole price while you're still paying the loan off.
Key takeaways
- → Section 179 deducts the full equipment price the year it's placed in service.
- → Financed equipment qualifies — the deduction can exceed your cash outlay that year.
- → Used equipment new to your business qualifies just like new.
- → Annual limits and phase-outs apply and change yearly — check with your CPA.
How the deduction works with financing
Buy a $100,000 machine, put 10% down, finance the rest, and you can still deduct the full $100,000 in the year you place it in service — subject to the annual limit.
That's a real timing advantage. Your tax deduction shows up now while the cost spreads out over the loan term, as covered in the equipment financing guide.
What qualifies
Tangible business equipment used more than half the time for business — excavators, skid steers, trucks, and other construction machinery. It must be purchased or financed and put into service during the tax year.
Used equipment qualifies as long as it's new to your business, which makes a smart used equipment purchase even more attractive.
Section 179 vs bonus depreciation
Section 179 expenses the cost up to an annual cap and can't create a loss. Bonus depreciation applies a percentage to qualifying assets and can create a loss.
Many contractors use Section 179 first, then bonus depreciation on whatever's left. The right order depends on your tax situation.
How it affects the lease vs buy decision
Section 179 can tip a close lease-versus-buy call toward financing to own, since a capital lease can also qualify. Our lease vs buy guide walks through it.
Either way, talk to your CPA before year-end — the after-tax cost can swing more on the deduction than on the interest rate.
Put it to work
If a needed machine also delivers a year-end deduction, financing it before December can make sense. Estimate the payment with our loan calculator, then line up financing.
eBoost Partners finances new and used equipment through its construction business financing.
Related guides
Equipment financing overview
How equipment loans work.
Equipment leasing vs buying
How taxes affect the decision.
Heavy equipment financing
Finance dozers and loaders.
Used equipment financing
Used machines qualify too.
Construction loan rates
Compare financing costs.
Loan calculator
Estimate your payment.