If you’re planning to invest in new or used equipment in 2025, there’s good news. Thanks to updated tax laws, your business may be able to write off the entire cost of qualifying equipment in the year of purchase. It’s a smart way to keep more cash in your business while getting the tools you need to get the job done right.
Here’s how Section 179 and bonus depreciation work together to maximize your savings.
What is Section 179?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment that is financed or purchased and placed into service during the tax year. For 2025, the deduction limit is $ 1.25 million.
This limit applies to both new and used equipment as long as it’s used for business purposes. That means if you buy a used Ledwell Feed Trailer or a brand new Water Truck and start using it in your business before December 31, 2025, you can deduct the full amount, up to the Section 179 limit.
What is Bonus Depreciation?
Bonus depreciation kicks in once you’ve hit the Section 179 cap. In 2025, the rate returns to 100 percent, meaning a business can fully deduct any amount exceeding the $1.25 million Section 179 limit.
The best part is that bonus depreciation has no dollar limit and also applies to used equipment. The only restriction is that used equipment cannot come from a related party, like a family-owned affiliate or subsidiary.
How They Work Together
Section 179 and bonus depreciation can be used in the same tax year. Section 179 is applied first, followed by bonus depreciation on the remaining amount.
This combination can result in a complete write-off of the first year for most equipment purchases.
Example:
Let’s say a customer buys $1.7 million worth of Ledwell equipment.
The first $1.25 million is deducted under Section 179.
The remaining $450,000 is eligible for 100 percent bonus depreciation.
The result equals $1.7 million entirely written off in the first year.
This is real money saved, and a real reason to act before the end of the year.
Used Equipment Rules
Yes, both Section 179 and bonus depreciation also apply to used equipment. That’s great news for customers looking at pre-owned trucks, trailers, or other machinery. To qualify for the full tax benefit, the equipment must meet a few simple conditions:
· Equipment must be new to the buyer (even if it’s previously used by someone else)
· Equipment must be purchased, not gifted or inherited
· Equipment must be used for business and placed in service within the tax year
· Equipment must not be bought from a related party
A related party includes close connections, such as family members, spouses, or entities where there’s common ownership or control. For example, if you own two businesses and one sells equipment to the other, that’s considered a related party transaction and would not qualify under bonus depreciation rules.
By following these guidelines, your used equipment purchase can still deliver the same big tax savings as buying new.
This tax break is one of the best opportunities businesses have to reduce their tax liability while investing in the equipment they need to grow. Whether it’s Crash Trucks, Dump Trucks, or HydraTail Trailers, Ledwell is here to help you make the most of your purchase.