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SECTION 179 MADE SIMPLE: CONSTRUCTION EQUIPMENT TAX DEDUCTIONS FOR CONTRACTORS

UNDERSTANDING SECTION 179 FOR CONSTRUCTION EQUIPMENT

Investing in construction equipment is an important part of growing your business, but understanding the potential tax benefits can make that investment even more valuable. Section 179 of the IRS tax code allows qualifying businesses to deduct the cost of eligible equipment in the tax year it is placed into service, rather than spreading the deduction over several years through traditional depreciation.

For contractors, this can create opportunities to upgrade aging machines, expand fleet capacity, and improve productivity while potentially reducing taxable business income. At McCann Industries, we help contractors throughout Northern Illinois, Northern Indiana, and West Michigan explore construction equipment options and financing solutions that support their business goals.

Whether you're considering a new excavator, compact track loader, skid steer, or wheel loader, understanding Section 179 can help you make informed equipment purchasing decisions before year-end.

HOW DOES SECTION 179 WORK IN 2026?

For the 2026 tax year, qualifying businesses may deduct up to $2,560,000 in eligible equipment purchases under Section 179. The deduction begins to phase out when total qualifying equipment purchases exceed $4,090,000. The deduction is also subject to taxable business income limitations and other eligibility requirements.

One common question contractors ask is whether used construction equipment qualifies for Section 179. Both new and qualifying used equipment may be eligible, provided the purchase meets IRS requirements. Equipment generally must be acquired for business use and placed into service during the applicable tax year.

Another important consideration is timing. Simply signing a purchase agreement or making a deposit before December 31 may not qualify equipment for a current-year deduction. Generally, the equipment must be ready and available for its intended business use by December 31, 2026.

Construction equipment that may qualify for Section 179 includes:

  • Excavators and mini excavators
  • Skid steers and compact track loaders
  • Wheel loaders and backhoe loaders
  • Bulldozers and earthmoving equipment
  • Qualifying attachments and construction machinery
  • Eligible new and used business equipment

CAN YOU USE SECTION 179 ON FINANCED CONSTRUCTION EQUIPMENT?

Contractors often wonder whether they must pay for equipment in full to qualify for Section 179. In many cases, qualifying financed equipment may be eligible for the deduction even when payments extend beyond the current tax year. Eligibility depends on the financing arrangement, the nature of the purchase, and applicable IRS requirements.

This creates opportunities for contractors to invest in necessary equipment while managing cash flow. Instead of paying the full purchase price upfront, qualifying businesses can explore financing options that spread payments over time while potentially benefiting from eligible first-year deductions.

Section 179 is also different from bonus depreciation. Section 179 is an elective deduction subject to annual limits and taxable business income restrictions, while bonus depreciation is a separate provision that may allow additional first-year deductions on qualifying equipment. Contractors should work with their tax advisors to determine how these provisions apply to their businesses.

McCann Industries offers commercial equipment financing and leasing solutions through lending partners. Explore our construction equipment credit and financing options to learn more about available programs and purchasing opportunities.

CALCULATE YOUR POTENTIAL SECTION 179 TAX SAVINGS

How much could Section 179 save your construction business? Actual tax savings depend on several factors, including equipment cost, taxable income, business use, and applicable depreciation rules. While Section 179 may reduce taxable income, the amount deducted is not necessarily equal to the amount saved in taxes.

The CNH Capital Tax Savings Calculator provides a convenient way to estimate potential deductions and tax savings associated with qualifying equipment purchases. Contractors can use this resource to evaluate possible financial benefits before discussing their plans with an accountant or tax professional.

Use the CNH Capital Section 179 Tax Calculator to estimate your potential savings and explore how an equipment investment may fit into your year-end business planning.

TAKE ADVANTAGE OF Q4 CONSTRUCTION EQUIPMENT SPECIALS

The fourth quarter is an important time for contractors evaluating fleet replacements, equipment upgrades, and upcoming project demands. Purchasing qualifying equipment before year-end may help your business prepare for the next construction season while potentially taking advantage of current-year tax deductions.
McCann Industries offers new and used construction equipment from established manufacturers, including CASE, KOBELCO, and Takeuchi. Contractors can compare machines suited to excavation, grading, material handling, landscaping, and other demanding applications.

Before purchasing, it's important to consider equipment availability, delivery timing, financing terms, and whether the machine can be placed into service before the tax-year deadline. Our team can help you explore available inventory and identify equipment suited to your applications and budget.

Browse our construction equipment specials and promotions to review current opportunities, then contact McCann Industries to request a personalized equipment quote.

WHY CHOOSE McCANN INDUSTRIES FOR CONSTRUCTION EQUIPMENT SALES AND SERVICE?

Choosing the right equipment supplier means finding a partner who can support your business beyond the initial purchase. Founded in 1967, McCann Industries is a family-owned construction equipment and supply provider serving contractors and municipalities throughout Northern Illinois, Northern Indiana, and West Michigan. With multiple locations across the region, McCann offers convenient access to new and used construction equipment from established manufacturers, along with the resources needed to support long-term equipment ownership and fleet management.

Our experienced equipment sales and application specialists help customers compare machinery, evaluate commercial financing and leasing options, and identify solutions suited to their specific projects. Whether you're purchasing your first compact track loader or expanding a large construction fleet, McCann Industries provides knowledgeable guidance and flexible purchasing solutions to help you make informed equipment decisions.

Ongoing maintenance and reliable parts support are equally important to keeping your business productive. McCann's factory-trained service technicians provide preventive maintenance, equipment diagnostics, and professional repairs to help reduce downtime and keep machinery operating efficiently. Contractors can also rely on our parts specialists for genuine replacement components and equipment attachments, ensuring access to the support needed throughout the equipment's service life. From initial equipment selection to ongoing maintenance and repairs, McCann Industries is committed to helping contractors protect their investments and keep projects moving.

PLAN YOUR YEAR-END EQUIPMENT PURCHASE WITH McCANN INDUSTRIES

If you're considering a construction equipment purchase before the end of 2026, McCann Industries can help you compare available machinery, explore Q4 promotions, and review financing options that support your business.

Start by using the CNH Capital Section 179 Tax Calculator to estimate potential tax benefits. Then explore our equipment specials and credit and financing resources to evaluate your purchasing options.

Ready to upgrade your fleet? Contact McCann Industries to request a construction equipment quote, discuss available inventory, or connect with our service and parts specialists. Our team is ready to help you find equipment that supports your next project and long-term business goals.

Tax Disclaimer: This content is provided for general informational purposes only and does not constitute tax, legal, or accounting advice. Section 179 eligibility, deduction limits, depreciation treatment, and actual tax savings depend on individual circumstances and applicable federal and state tax laws. Consult a qualified tax professional before making equipment purchasing or tax-planning decisions.