Did you know that when you buy equipment, vehicles, or improvements for your business, you don’t always have to wait years to write off the cost? Thanks to accelerated depreciation, you may be able to deduct more or even all of the purchase in the first year, putting tax savings and cash flow back in your hands faster.
What Is Accelerated Depreciation?
Accelerated depreciation allows you to take bigger deductions in the early years of owning an asset instead of spreading them evenly over its useful life.
Bonus Depreciation (2025): Deduct 100% of the cost of most new and used equipment in the year it is placed in service (after Jan 19, 2025).
Section 179 Expensing (2025): Deduct up to $2,500,000 of qualifying purchases (with a $4,000,000 annual spending cap).
Why It Matters
Bigger deductions early mean:
- Lower tax bills in the year you buy assets
- Improved cash flow for reinvestment or savings
- Faster return on your business investments
Quick Example
You purchase $100,000 of equipment in 2025.
Normally: Deduction spread over 5 to 7 years.
With accelerated depreciation: Deduct the full $100,000 in 2025.
If you are in the 25% tax bracket that is $25,000 in tax savings right away.
What About Real Estate?
While buildings must still be depreciated over decades (27.5 years for residential, 39 years for commercial), certain items like appliances, furniture, or improvements may qualify for accelerated depreciation.
Example: Buy $10,000 in appliances for your rental property and you may deduct the full amount in the first year.
Things to Keep in Mind
- If you sell the asset, some of the tax savings may be recaptured.
- Future deductions will be smaller since you take most of it upfront.
- Not every asset qualifies, and large purchases may be subject to limits.
The Bottom Line
Accelerated depreciation is one of the most powerful tools for lowering taxes and boosting cash flow. If you are planning equipment purchases, improvements, or property upgrades this year, now is the time to evaluate your options.
Want to see how this strategy could work for your business? Contact our team today and we will help you run the numbers and maximize your savings.
Stay proactive,
RSK Tax & Consulting, LLC
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Year-End Equipment Financing Spotlight
As we approach year-end, many CPAs are advising clients to consider equipment purchases as a strategic way to reduce taxable income. Under Section 179 and bonus depreciation rules, qualifying equipment placed in service before December 31st may be fully deductible, making now the perfect time to invest.
At M&T Bank, we specialize in flexible, fast, and consultative equipment financing solutions tailored to your business needs.
Why M&T Bank?
- Fast credit decisions and streamlined documentation
- Term Loans, Equipment Lines of Credit, FMV Leases, TRAC Leases, and more
- Specialized teams for construction, transportation, healthcare, and manufacturing
- Over 25 years of equipment finance experience
What Our Clients Say
“M&T understood our business and the equipment we needed. Their team didn’t just offer financing, they offered insight.”
— Byrne Dairy
“We’ve worked with other banks, but M&T’s responsiveness and flexibility made all the difference.”
— Mid-Atlantic Construction Firm
“M&T’s equipment finance team helped us structure a lease that aligned with our tax strategy and cash flow.”
— Healthcare Provider
Let’s Talk
If you are planning year-end purchases, I would be happy to discuss how M&T can support your goals.
