If you’re planning to invest in forklifts, conveyors, or other material handling equipment this year, there’s good news: Section 179 of the IRS tax code offers a powerful way to turn your capital expenditures into immediate tax savings. Here’s how it works—and why 2025 is a great year to take advantage of it.
What Is Section 179?
Section 179 allows businesses to deduct 100% of the purchase price of qualifying equipment in the year it is placed in service, instead of depreciating it over several years. This can dramatically improve your cash flow and reduce your tax liability for the current year.
In 2025, the maximum deduction limit is $2,500,000, with a phase-out beginning at $4,000,000 in total equipment purchases. Once your purchases exceed $6,500,000, the deduction is fully phased out. section179.org
Why Material Handling Equipment Qualifies
Material handling equipment—such as forklifts, pallet jacks, racking systems, conveyors, and loading dock gear—typically qualifies under Section 179 because it is considered tangible personal property used in business operations. Both new and used equipment can qualify, if it’s “new to you” and used more than 50% for business purposes.
Eligible Examples:
- Forklifts and lift trucks
- Warehouse racking and shelving
- Dock & Door equipment
- Conveyor systems
- Robotic integration systems
- Ergonomic lifting solutions
Bonus Depreciation: A Powerful Add-On
In addition to Section 179, businesses can also benefit from bonus depreciation, which allows you to deduct a percentage of remaining equipment costs after the Section 179 limit is reached. For 2025, bonus depreciation is set at 100%, meaning you can potentially write off the entire cost of qualifying equipment in the first year. section179.org
How It Works: A Quick Example brooksmachinery.com
Let’s say your company purchases $300,000 worth of qualifying material handling equipment in 2025:
This immediate deduction can significantly reduce your taxable income and improve ROI from day one.
Important Requirements
To qualify for Section 179 in 2025:
- Equipment must be purchased or financed and placed in service by December 31, 2025
- More than 50% of the time must be used for business.
- This applies to new and used equipment.
- Deduction begins to phase out after $4,000,000 in total purchases.
Strategic Planning Tips
- Time your purchases to ensure equipment is operational before year-end.
- Consult your tax advisor to confirm eligibility and optimize your deduction strategy.
- Consider combining Section 179 with bonus depreciation to maximize tax benefits.
Final Thoughts
Section 179 is more than just a tax break—it’s a strategic tool for growth. By investing in the material handling equipment your business needs now, you can reduce your tax bill, improve cash flow, and position your operations for greater efficiency and scalability.
Let Action Lift help plan your material handling equipment purchases! We have new and used equipment in stock & ready to take advantage of Section 179 tax breaks for 2025.