Save on Year-End Equipment in 2026 with Accelerated Tax Deductions
With the end of the year fast approaching, now is the time to take advantage of powerful tax tools that can help you save money while investing in your business: Section 168(k), also referred to as bonus depreciation, and Section 179. These sections offer significant tax incentives to promote business growth, allowing you to save substantially while upgrading your equipment.
In this article, we’ll break down:
- The details about these important tax-saving tools
- How qualifying purchases can benefit your business
- How much your business could potentially save
Qualifying purchases include financed equipment that is placed in service on or before Dec. 31, 2026.
Need assistance with your tax strategy for equipment purchases? Our knowledgeable team at Altec Capital is ready to help. Contact us today.
Save with Section 179
Section 179 allows businesses to immediately expense qualifying equipment in the year it is placed in service. Popular among small and midsize businesses, this allowance creates a larger initial deduction and reduces a business’s tax burden for that year.
The maximum amount Section 179 allows for 2026 is $2.56 million on qualified purchases of up to $4.09 million. Section 179 is reduced dollar for dollar when the total amount of equipment purchased exceeds $4.09 million, reaching zero at $6.65 million of qualifying purchases. In addition, an income limitation limits a business’s Section 179 expense to taxable income, not allowing Section 179 expense to create a tax loss.
If these limits impact your business’s ability to use Section 179, you may still qualify for bonus depreciation.
Section 168(k): Bonus Depreciation
Bonus depreciation offers significant advantages for capital expenditure planning. Businesses may be able to expense 100% of the cost of certain qualified property acquired and placed in service after Jan. 19, 2025. For qualifying equipment placed in service during 2026, this immediate deduction can help reduce taxable income and improve cash flow.
For property acquired and placed in service between Jan. 1-19, 2025, the applicable bonus depreciation rate is 40%.
How Much Money Could You Save?
Section 179 and Section 168(k) are valuable tools for businesses seeking to grow and reduce their tax liabilities. It is essential to work with tax professionals who can help you navigate the complexities, confirm your eligibility and ensure you make the most of these opportunities.
The following example shows hypothetical first-year savings under Section 179 and bonus depreciation compared with standard depreciation.
| DESCRIPTION | SECTION 179 | BONUS | NEITHER |
|---|---|---|---|
| Equipment Purchase Price | $50,000 | $50,000 | $50,000 |
| Section 179 First Year Write-Off | ($50,000) | ||
| Bonus Depreciation | ($50,000) | ||
| MACRS Midyear Depreciation | ($10,000) | ||
| Tax Savings on Equipment (21% Rate) | $10,500 | $10,500 | $2,100 |
| Year End Benefit (Compared to Neither) | $8,400 | $8,400 | $0 |
*This hypothetical example assumes the equipment was acquired and placed in service during 2026 and qualifies for 100% bonus depreciation. The calculations above are not intended to provide tax or legal advice. Please consult your tax advisor.
Contact Altec Capital
Don’t miss out on applying these tax benefits to your purchases. Our knowledgeable finance team at Altec Capital is ready to help you find the best options to achieve significant savings.
Altec Capital’s focus is meeting customers’ unique equipment financing needs. Altec Capital offers deferrals of up to 90 days, aggressive financing rates and a variety of lease options. Most importantly, Altec Capital makes the financing process easy. As a single source solution for all your financing needs, Altec Capital eliminates the need to manage multiple banking relationships.
For more information on Altec Capital’s financing options, call (888) 408-8148 or email finance@altec.com.