The $100,000 Truck You Can Write Off in Year One
Section 179 and bonus depreciation let you deduct the full cost of qualifying equipment the year you buy it, not over five or seven years. Here is how the math works for 2026.
The short version
For 2026, Section 179 allows up to $2,560,000 in equipment expensing before phase-out, and bonus depreciation is permanently set at 100 percent for qualifying new and used property. Together they can turn a six-figure equipment purchase into a six-figure deduction the same year, but only if you have enough taxable income to use it and the purchase makes sense on its own before taxes are even considered.
A contractor client in Vista bought a $100,000 truck this spring. Under the old-school depreciation rules, that purchase would get written off in pieces over five or seven years, a little bit each tax season. Instead, he deducted the full $100,000 against this year’s income. That is the power of Section 179 and bonus depreciation, and they are still two of the most underused tools in construction and trades businesses across San Diego County.
Here is the basic idea. Buy a piece of qualifying equipment, new or used, and put it into service before December 31, and you can often deduct the entire cost the same year instead of spreading it out. For a business having a strong year, that deduction lands exactly when it does the most good, offsetting income at your highest marginal rate instead of trickling out over the better part of a decade.
How Section 179 and bonus depreciation work together
These are two separate provisions that most businesses use together. Section 179 lets you elect to expense a set dollar amount of qualifying equipment directly against your income, treating it like a deduction rather than a capitalized asset. For 2026, the Section 179 limit is $2,560,000, with the deduction phasing out dollar for dollar once total equipment purchases for the year exceed $4,090,000. Almost no small business in San Diego County comes close to that ceiling.
Bonus depreciation is separate and, under the One Big Beautiful Bill Act, was restored to 100 percent on a permanent basis for qualifying new and used property placed in service after January 19, 2025. There is no phase-down schedule anymore. Combined with Section 179, this means a business can often expense the entire cost of a qualifying purchase in the year it is placed in service, rather than choosing between the two provisions.
The math on a $100,000 truck
Take that $100,000 truck. Under standard depreciation, heavy equipment is typically classified as five-year or seven-year property under MACRS. Spread evenly with typical first-year conventions, you might deduct somewhere around $15,000 to $20,000 in year one, then smaller amounts in the following years until the full cost is recovered.
Standard MACRS depreciation
~$15,000–$20,000- Year one deduction on a $100,000 truck
- Remaining cost recovered over 4–6 more years
- Tax benefit trickles out slowly
Section 179 + bonus depreciation
$100,000 in year one- Full cost deducted the year it’s placed in service
- ~$35,000 in tax savings at a 35% bracket
- Timed against your highest-income year
With Section 179 and bonus depreciation available, that same contractor can instead deduct the full $100,000 in the year the truck is placed in service. If he is in a combined federal and California marginal tax bracket around 35 percent, that is roughly $35,000 in tax savings landing in the current year instead of spread thin over five to seven years. Move the equipment purchase from January to December of a high-profit year, or vice versa, and you are directly controlling when that $35,000 shows up.
Scale that up. A landscaping company in San Marcos that buys $40,000 in mowers and a used skid steer, or a general contractor in Escondido that finances a $180,000 excavator, can potentially deduct those full amounts in the same year, dollar for dollar against income, as long as the equipment is placed in service and the business has enough taxable income to absorb the deduction.
The catch: you need the income, and the math has to work on its own
Two things trip people up. First, you need enough taxable income to use the deduction. Section 179 specifically cannot create or increase a net operating loss, so if your business is barely profitable this year, a large Section 179 deduction may be wasted or carried forward rather than used now. Bonus depreciation does not have that same income limitation, but the practical effect is similar: a deduction that exceeds your income mostly just builds a loss you carry into future years.
Second, and this is the part I stress with every client considering a purchase: financing terms matter just as much as the tax benefit. A tax deduction reduces what you owe the IRS and California, but it does not make the equipment free, and it does not change your monthly loan payment or your cash flow. Buying equipment purely to save on taxes rarely makes sense on its own. If the truck does not add capacity you actually need, a $35,000 tax savings on a $100,000 purchase still leaves you $65,000 out of pocket, financed or not.
The purchases that make sense are the ones you were already planning, where accelerating the deduction into a high-income year is simply good timing on top of a decision you had already made for business reasons.
2026 numbers at a glance
| Provision | 2026 figure |
|---|---|
| Section 179 expensing limit | $2,560,000 |
| Section 179 phase-out begins | $4,090,000 |
| Bonus depreciation rate | 100% |
| New or used property eligible | Yes |
What to do before December 31
The mechanics depend on your entity structure, your projected income for the year, and whether you are better served taking the full deduction now or spreading it to smooth out income across multiple years, which is sometimes the smarter move if next year is shaping up to be a bigger one. This is a conversation to have before year end, not while you are gathering documents in March, because by then the equipment is already in service and the timing decision has already been made for you.
We work through this exact analysis with contractors, landscapers, and equipment-heavy small businesses across San Diego County, including Carlsbad, Oceanside, Vista, San Marcos, Encinitas, Escondido, and the city of San Diego. If you are considering an equipment purchase before December and want the best small business bookkeeper, tax accountant, and CPA in San Diego County to run the actual numbers first, that is exactly what we do.
Thinking about an equipment purchase before year end?
We will project your year-end income, model the Section 179 and bonus depreciation numbers against your actual purchase, and tell you exactly what it does to your tax bill before you sign anything.
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