Section 179 and 100% Bonus Depreciation: The 2026 Year-End Equipment Deadline

If you’re a U.S. buyer weighing an equipment purchase, the tax calendar is part of the math — and for 2026 the deduction rules are unusually generous and, importantly, they cover used machines. Here’s the timely version, with the one deadline that trips people up.

Not tax advice. Figures below are for the 2026 U.S. tax year and can hinge on your specific situation — confirm with your CPA before you buy. This applies to U.S. taxpayers; there’s a one-line note for Canada below.

The write-off doesn’t follow your purchase order — it follows the in-service date. A machine bought in December only counts if it’s working by December 31.

What you can deduct in 2026

• Section 179: expense up to $2,560,000 of qualifying equipment for tax year 2026, with the deduction phasing out once total purchases exceed $4,090,000 (inflation-adjusted figures from IRS Rev. Proc. 2025-32).
• 100% bonus depreciation is now permanent. The One Big Beautiful Bill made 100% first-year bonus depreciation permanent for qualifying property acquired after January 19, 2025, with no annual dollar cap — useful above the Section 179 limit.

Used equipment qualifies

This is the part that matters for a used-equipment marketplace: both incentives apply to used machines, not just new. Section 179 has always allowed “new to you,” and the permanent 100% bonus depreciation also covers used property (subject to the not-previously-used-by-you and acquired-by-purchase rules). The machine also has to be used more than 50% for business.

The December 31 deadline

The deduction is claimed in the tax year the equipment is placed in service — delivered, set up and ready to work — not when it’s ordered or paid for. That’s why Q4 gets busy: a machine bought in late December only counts for the year if it’s actually operational by the 31st. Transport and setup time are part of the deadline, so they’re worth locking in early.

A note for Canada

Canada doesn’t use Section 179; it uses Capital Cost Allowance classes, with measures like the Accelerated Investment Incentive accelerating first-year deductions. The specifics differ — confirm with a Canadian accountant.

How to use it

• Confirm the numbers with your CPA for your situation and entity.
• Line up financing early — see what gets approved for financing and how a down payment changes your buying power.
• Build in transport time so the machine is in service before year-end, and keep the purchase and in-service documentation.