If you're planning to buy shop equipment before the end of the year, November is the month to move, not December. To count toward your 2026 deduction, equipment has to be placed in service by December 31. Freight, installation and setup can easily take 2–4 weeks. A purchase order signed December 15 may not be installed and running by December 31. One signed November 15 almost certainly will be.
The good news: the 2025 tax law (the "One Big Beautiful Bill," which the IRS now calls the Working Families Tax Cuts) made the year-end equipment math much better than it was a year ago.
What Section 179 Actually Does
Section 179 lets a business deduct the full purchase price of qualifying equipment in the year it's placed in service, instead of depreciating it over five to seven years. For a shop buying a lift, a compressor, an A/C machine or a fluid management system, the tax benefit lands on this year's return.
For tax years beginning in 2026, the IRS sets the Section 179 limit at $2,560,000. That limit starts to phase out once you place more than $4,090,000 of qualifying equipment in service during the year (IRS Rev. Proc. 2025-32). Independent shops and most service chains will never get close to either number.
Two rules matter more than the limits:
- Placed in service means operating. The equipment has to be installed and used in your business by December 31. A machine still in its crate on your loading dock doesn't count.
- Section 179 can't exceed your business income. The deduction is capped at your taxable business income for the year. Anything over that carries forward to next year.
Bonus Depreciation Is Back to 100%
Bonus depreciation is a separate first-year write-off. Under the old schedule it was phasing down: 80% in 2023, 60% in 2024, 40% in 2025. The 2025 law ended the phase-down. Qualifying property acquired after January 19, 2025 is now eligible for a permanent 100% first-year deduction.
The practical difference: bonus depreciation isn't capped by your business income the way Section 179 is, so it can help in a year when profits are thin. Many shops use both, and your CPA will decide which one to apply to which purchase.
A Worked Example
Say your shop buys a $28,000 equipment package (a lift, a tire changer and a wheel balancer) and has it installed and running in November 2026:
- You deduct the full $28,000 on your 2026 return instead of spreading it over 5–7 years.
- At a 25% effective federal tax rate, that's about $7,000 in tax savings this year.
- Your effective after-tax cost for the package drops to about $21,000, in the year you buy it.
State taxes, your actual bracket and your entity type will change the numbers, so run them with your CPA.
Financed Equipment Still Qualifies
Many shop owners assume Section 179 only applies to equipment paid for in cash. It doesn't. Equipment bought with a loan or equipment financing, or on a $1-buyout lease, generally qualifies in the year it's placed in service, even though you haven't paid it off. (True operating leases, where you hand the equipment back at the end, work differently. Ask your CPA.)
That's the part that makes November interesting. With a modest down payment and a financing term of a few years, the first-year tax benefit on a purchase can approach, or even exceed, what you actually paid out of pocket that year. Meanwhile the equipment is working in your shop while you pay it off. Alamo offers business financing with 24–60 month terms and fast approvals.
What to Order in November to Make December 31
A lot of shop equipment (lifts, compressors, A/C machines, tire changers, balancers) ships in about 1–2 weeks, and installation takes a day or two once it arrives. Holiday freight schedules and installer calendars fill up fast in December, so build in a buffer. For bulk fluid systems or compressed air installs that need lines run or permits pulled, allow 3–4 weeks from order to operating.
This article is general information, not tax advice. Tax rules depend on your business, so confirm with your CPA before you buy.
Ready to put equipment in service before December 31? Call Alamo at (817) 865-3707. We'll help you confirm lead times and install dates so you make the deadline without a scramble.