Section 179 for New and Used Equipment
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As we move into 2025, there are some major updates to Section 179 deductions and Bonus Depreciation that could make 2025 one of the best years yet for investing in new and used construction equipment. Whether you’re running heavy machinery on large job sites or compact track loaders for smaller projects, these tax benefits can significantly reduce your equipment ownership costs.
At Luby Equipment, we want our customers to understand how these changes can help them maximize their investment.
Section 179 Deduction
Section 179 allows businesses to deduct the full purchase price of qualifying equipment—such as excavators, dozers, track loaders, and other machines—purchased or financed during the tax year.
In 2025, the maximum deduction has more than doubled compared to 2024.
| Year | Section 179 Maximum Deduction | Phase-Out Threshold |
|---|---|---|
| 2021 | $1,050,000 | $2,620,000 |
| 2022 | $1,080,000 | $2,700,000 |
| 2023 | $1,160,000 | $2,890,000 |
| 2024 | $1,220,000 | $3,050,000 |
| 2025 | $2,500,000 | $4,000,000 |
That means in 2025, businesses can deduct up to $2.5 million in qualifying equipment purchases, with the deduction phasing out after $4 million in total equipment purchases.
Bonus Depreciation
Bonus depreciation allows businesses to deduct a large percentage of the cost of eligible equipment in the first year it’s placed into service.
Here’s how bonus depreciation has changed over the past few years:
| Year | Bonus Depreciation | Equipment Eligibility |
|---|---|---|
| 2021 | 100% | New and used |
| 2022 | 100% | New and used |
| 2023 | 80% | New and used |
| 2024 | 60% | New and used |
| 2025 | 100% | New and used |
In 2025, 100% bonus depreciation is back, allowing businesses to write off the entire cost of qualifying new or used equipment.
What This Means for Contractors
These changes make 2025 an incredible opportunity for contractors to upgrade fleets or expand capacity:
Applies to both new and used equipment: Whether you’re buying a brand-new CASE excavator or a well-maintained Takeuchi track loader, the deductions apply.
Bigger Section 179 deductions: Deduct more than twice the amount compared to 2024.
Return of 100% bonus depreciation: Get the full benefit of your equipment purchase in year one.
Section 179 Tax Benefit Calculator
Section 179 Estimator (2025)
Disclaimer: The information provided by Luby Equipment regarding Section 179 and Bonus Depreciation is for general informational purposes only and may not reflect the latest legal or tax developments. While we strive to share up-to-date resources in line with IRS guidelines, Luby Equipment is not an official IRS resource or a tax advisor. Always consult a qualified tax professional for personalized advice regarding your specific situation.
Take Advantage with Luby Equipment
At Luby Equipment, we carry a full lineup of CASE and Takeuchi construction equipment—from heavy excavators and dozers to compact track loaders and attachments. With Section 179 and bonus depreciation back at full strength in 2025, now is the time to make smart investments that will pay off both in productivity and tax savings.