Buy planned equipment before December 31

ExploreIRC §168(k), §179For business owners

Explore: well supported, often missed.

Equipment your business buys and puts into use by December 31 can usually be deducted in full this year instead of being written off over five or seven years. With 100% bonus depreciation back for property bought after January 19, 2025, the full write-off is available again.

The key is timing: if you were going to buy it early next year anyway, buying and installing it before year end moves the deduction into this year.

How it works

Equipment placed in service by December 31 can usually be written off this year instead of over several years. 100% bonus depreciation is back for property bought after January 19, 2025.

An example: the Harpers

Harper Restoration Group, the Harpers' S corp in the Cratchit demo, had two new dehumidifier trailers budgeted for spring, at $45,000. Cratchit flagged that buying them and putting them in service before December 31 would let the company deduct the full cost this year.

It estimates that saves the Harpers about $12,686 in tax this year. The spending was already planned, so the strategy changes when they buy, not whether.

What makes it hold up

The invoice and the date it was delivered and put into use
What it’s used for and which company owns it
Delivery and installation costs, which count as part of its cost

Risks

Low. NC adds back most bonus depreciation on the state return. If the equipment is sold later, the deduction can be taxed back. Buying only for the write-off still costs real cash.

Questions to ask your CPA

Bonus depreciation or Section 179 for this purchase?
How does NC treat it?
Does it need to be in service before year end to count?

Common questions

Does buying it before December 31 count?

It has to be placed in service, meaning delivered, set up and ready to use, by December 31. Paying for it isn't enough.

What is the difference between Section 179 and bonus depreciation?

Both allow an immediate write-off. Section 179 can be chosen asset by asset but is limited to your business income. Bonus depreciation has no income limit and can create a loss. Your CPA can choose the better one for each purchase.

Does used equipment qualify?

Yes, as long as it's new to your business.

Does my state follow the federal rules?

Not always. Many states, including North Carolina, add back most bonus depreciation, so the state deduction comes more slowly.

See what this could save your family

Cratchit runs every strategy in this library against your real numbers, rates it, and keeps the records that make it hold up. Take a guided tour with the Harpers, a sample family.

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Education, not advice. Tax law changes and every situation is different, so confirm the details with your CPA or tax advisor before acting. This page was last checked against tax law as of October 2026, including the 2025 tax law, in October 2026.