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Section 179 Deadline Checklist: Buy and Put Equipment in Service by December 31, 2026
By Christopher Chavez, Founder — Northwood Capital Group
December 31, 2026 is a Thursday, and it is the last day to put equipment into service if you want the full purchase price deductible on this year's return. Section 179 lets a business write off the cost of qualifying equipment in the year it is placed in service instead of spreading it over five to seven years — and it applies to financed equipment, not just cash buys. Northwood Capital Group LLC finances equipment nationwide for business owners, with credit decisions typically in 24 to 72 hours.
The short answer: to claim the deduction for 2026, the equipment must be purchased and placed in service by December 31, 2026. Ordering in November is not enough — delivery, installation and readiness count. That means the practical cutoff for signing is early to mid-December, depending on the machine.
The 2026 numbers that matter
| Section 179 | 100% bonus depreciation | |
|---|---|---|
| First-year deduction | Up to $2,560,000 | 100% of cost, no dollar cap |
| Spending cap | Phases out after $4,090,000 of purchases | None |
| Limited to business profit | Yes | No — can create a net operating loss |
| Used equipment | Qualifies | Qualifies (your first use of it) |
| Order applied | Taken first | Applied to what is left |
The two rules work together: Section 179 is elected first up to its cap, then 100% bonus depreciation can cover the remaining basis of qualified property acquired after January 19, 2025 and placed in service during 2026. Most small and mid-size equipment purchases fall well inside both.
What the deduction is actually worth
| Equipment purchase price | 2026 first-year deduction | Illustrative tax savings at 25% |
|---|---|---|
| $50,000 | $50,000 | about $12,500 |
| $150,000 | $150,000 | about $37,500 |
| $400,000 | $400,000 | about $100,000 |
| $1,000,000 | $1,000,000 | about $250,000 |
These figures assume the equipment qualifies, is in service by December 31, and that the business has enough taxable income to absorb the deduction. Your actual rate depends on entity type, marginal bracket, state treatment and other deductions — your CPA runs the real math.
Work backward from December 31
| Step | Normal time | Realistic target |
|---|---|---|
| Pick the machine, get a written quote | 1 to 3 days | First week of December |
| Apply with the quote and bank statements | Same day | By December 5 |
| Credit decision and written offer | 24 to 72 hours | By December 8 |
| Sign documents, add insurance, lien paperwork | 1 to 3 days | By December 12 |
| Vendor releases or delivers a stocked machine | 3 to 14 days | By December 15 |
| Install, test and put into service | 1 to 7 days | Before December 31 |
Custom-built or long-production machines, imported units and equipment needing site work (power, foundation, permits) can take weeks longer. If a machine cannot realistically be on your property and running by year-end, ask the vendor for a written delivery commitment before you commit the purchase — or plan it as a January purchase instead.
Deadline checklist
- Confirm the tax math with your CPA: taxable income this year, entity type, and whether Section 179 or bonus depreciation is the better fit.
- Get the quote in writing: make, model, year, hours or condition, price, attachments, delivery date, installation and taxes.
- Download four months of business bank statements as PDFs straight from your bank — not screenshots or photos of statements.
- Apply for financing: a short application plus the quote is enough to start. Read more in our Section 179 equipment financing guide.
- Compare the written offer: term, payment, total cost, down payment and what happens at the end of the term.
- Sign, insure and let the lender pay the vendor so the machine can be released.
- Take delivery, install and test it — the day it is ready for its intended use is your placed-in-service date.
- Save the proof: invoice, delivery receipt, loan documents and the in-service date, all for Form 4562.
Mistakes that kill a year-end deduction
- Ordered but not delivered. A deposit and a purchase order do not create a deduction; the machine must be in service.
- Delivered but not installed. A press brake that needs electrical work and a foundation is not in service until it can run.
- The wrong lease structure. A fair-market-value operating lease is rent expense, not a Section 179 write-off. See the finance vs. lease deduction breakdown.
- Bought in a personal name. The business must own and use the equipment; personal or mixed-use purchases create allocation problems.
- Not enough taxable income. Section 179 is capped by business profit for the year, so a big deduction can be wasted if income is thin.
- No paperwork. Without an invoice and delivery proof, the in-service date is hard to defend in an audit.
- Assuming the state follows the feds. Some states cap or decouple from federal expensing.
What equipment qualifies
- Construction and site work: excavators, skid steers, loaders, dump trucks — see construction equipment financing, the excavator guide and the skid steer guide.
- Manufacturing: CNC machines, lathes, press brakes, injection molders — see manufacturing equipment financing.
- Trucking and fleets: tractors, straight trucks and trailers — see commercial truck financing.
- Farms and landscaping: tractors, implements, mowers and compact loaders — see agricultural equipment financing and landscaping equipment financing.
- Medical and dental: chairs, imaging, lasers and sterilization — see medical and dental equipment financing.
- Used machines: pre-owned equipment qualifies when it is your first use of it — see used equipment financing.
Everything starts at the equipment financing overview, where you can also review specialty programs for marine and aviation assets.
Financing structures and the deduction
| Structure | Who owns it at the end | Typical tax treatment |
|---|---|---|
| Cash purchase | You | Full cost deductible in year one if eligible |
| Equipment loan | You | Full cost deductible; interest generally deductible |
| $1 buyout lease / EFA | You | Generally treated like a purchase |
| Fair-market-value lease | Return or buy | Payments deducted as rent |
| Short-term rental | No | Expensed as you go |
If the goal is a same-year write-off with a manageable payment, a loan or a $1 buyout structure is usually the fit. If cash flow matters more than the deduction, a lower-payment lease can make sense — the trade-offs are laid out in our equipment financing vs. leasing comparison.
Nationwide, including Texas, Florida and California
We finance year-end equipment purchases for business owners in all 50 states, including Houston, Dallas and San Antonio, Miami, Orlando and Tampa and Los Angeles, Orange County and the Inland Empire. Local guides cover Houston working capital, Dallas business loans and Orlando and Miami business loans.
How to apply before the deadline
- A written quote or invoice for the equipment (a phone photo of the invoice is fine)
- The last four months of business bank statements, downloaded as PDFs from your bank
- Your driver's license and a list of current equipment payments
- The delivery and installation date the vendor committed to
Submit it through the full application or the quick pre-qualification form, or call (714) 679-8886. Credit decisions typically arrive in 24 to 72 hours, which is why the machine you want this year should be quoted and applied for in early December.
One caution: this article is general education, not tax advice. Section 179 limits, bonus depreciation rules, vehicle caps and state conformity change, and your taxable income decides how much of the deduction you can actually use. Confirm the deduction with your CPA or tax professional before you sign.