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Insights · The equipment tax deduction

Section 179: the tax deduction for business equipment

Section 179 is a federal tax deduction that lets a business deduct the full cost of qualifying equipment from its taxable income in the year it's put to use — instead of spreading that deduction across several years of depreciation.

It lowers the income you're taxed on; the actual saving is the tax you would have paid on that amount, not the price of the equipment itself.

Here's how the 2026 limits work, and what changes when you finance the equipment rather than pay cash. General information — confirm how it applies to your business with a qualified tax advisor.

Published by Lamare Capital · Figures verified against current IRS guidance for the 2026 tax year · Updated June 2026
General information, not tax advice. Confirm how Section 179 applies to your business with a qualified tax professional.

What Section 179 is

Section 179 of the Internal Revenue Code lets a business deduct the full cost of qualifying equipment in the year it is placed in service, instead of depreciating it gradually over several years. The intent is to encourage businesses to invest in themselves.

It applies to most new and used business equipment put into service during the tax year — machinery, qualifying vehicles, technology, and more. The mechanics, eligibility, and limits are set by the IRS, and how they apply to any one business is a question for that business's tax professional.

The role split, stated plainly: the tax treatment is your CPA's domain. Lamare Capital's domain is the financing — arranging, structuring, and funding the equipment so it can be placed in service. We arrange the financing; your tax advisor confirms the deduction.

The 2026 numbers

$2,560,000
Maximum Section 179 deduction
$4,090,000
Spending cap — phase-out begins
$6,650,000
Deduction fully phased out
100%
Bonus depreciation, 2026
December 31, 2026
Equipment generally must be purchased and placed in service by this date to claim Section 179 for the 2026 tax year.

Figures reflect current IRS guidance for the 2026 tax year. "Phase-out" means the maximum deduction is reduced dollar-for-dollar once total equipment purchases exceed the spending cap. Confirm current figures and your eligibility with your tax advisor.


Section 179 vs. bonus depreciation

They are two different accelerated-deduction tools, and they work together. Section 179 is generally applied first, up to its limit and subject to the phase-out above. Bonus depreciation — back at 100% for 2026 — can then apply to remaining eligible cost.

Which combination is right for a given business depends on its income, its equipment spend, and its overall tax position. That is a calculation for a qualified tax professional, not a one-size answer.


Estimate the math

Drag to your equipment amount and select your estimated tax bracket for a rough picture of the deduction, potential tax savings, and net equipment cost. Illustrative only.

Drag to your equipment amount and select your tax bracket to see your estimate.
Equipment financing amount
$150,000
$30K$5M
Your estimated tax bracket
Potential deduction
Est. tax savings
Net equipment cost
Illustrative potential savings only, based on the amount and bracket you select. The deduction is capped at the 2026 maximum of $2,560,000 and is subject to IRS phase-out thresholds and your tax situation. Lamare Capital is a commercial finance broker, not a tax advisor — consult your tax professional before making financing decisions based on Section 179 estimates.

Where the financing fits

Section 179 turns on one thing you can control: getting the equipment placed in service within the tax year. Financing — rather than paying cash — is often how a business does that without draining its working capital. The equipment goes to work this year; the cash stays in the business.

Lamare Capital is a California-licensed commercial finance brokerage. We arrange equipment financing from $30,000 to $5,000,000 for business use, matched to the right structure for the deal. The tax outcome is your advisor's call; the financing is ours.

Financing partner: South End Capital, a division of Stearns Bank, N.A. (Member FDIC, Equal Housing Lender). Business-purpose financing only. All financing is subject to lender approval and credit review.

See your financing options

A short, no-obligation look at equipment financing for your business — from $30K to $5M, structured to get the equipment in service this year.

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Business-purpose financing only. Not an offer to lend or a commitment to provide financing.

Common questions

What is the maximum Section 179 deduction for 2026?

For the 2026 tax year, the maximum Section 179 deduction is $2,560,000, with the spending cap (phase-out) beginning at $4,090,000 and the deduction fully phased out at $6,650,000. These figures reflect current IRS guidance; confirm them with your tax advisor.

Does financing equipment still qualify for Section 179?

Yes. Financed equipment can qualify the same way purchased equipment does, provided it is placed in service during the tax year. Financing lets a business put the equipment to work this year while preserving working capital. Your tax advisor confirms the deduction for your situation.

How is Section 179 different from bonus depreciation?

They are separate accelerated-deduction tools that work together. Section 179 is applied first, up to its limit and subject to the phase-out; bonus depreciation, which is 100% for 2026, can then apply to remaining eligible cost. The right combination depends on your tax position — a question for your CPA.

When does equipment need to be placed in service?

To claim Section 179 for a given tax year, equipment generally must be purchased and placed in service by December 31 of that year. Confirm timing with your tax advisor.

Is this tax advice?

No. Lamare Capital is a commercial finance broker, not a tax advisor. This page is general information based on current IRS guidance. We arrange the financing; how Section 179 applies to your business is for your qualified tax professional to confirm.


Verify us

Lamare Capital is a licensed California DFPI Commercial Finance Broker, License #60DBO-185415 (status: active). Principal: Ted P. Lamare.

Confirm our license and review disclosures at lamarecapital.com/disclosures. Lamare Capital will never ask for sensitive financial information by text or email.

Contact: (213) 277-8762 · info@lamarecapital.com