If you are planning to purchase a forklift or other piece of material handling equipment between now and the end of the year, Section 179 could help reduce the after-tax cost of that investment.
Section 179 is a federal tax provision that allows eligible businesses to deduct the purchase price of qualifying equipment in the year it is placed in service. Without this provision, businesses generally recover the cost through depreciation deductions spread across several years.
Does Your Forklift Purchase Qualify for Section 179?
New and used forklifts can qualify for a Section 179 deduction when purchased for eligible business use. Many other types of material handling equipment may also qualify when used primarily for business purposes. For tax years beginning in 2026, businesses may deduct up to $2.56 million in qualifying purchases. The deduction begins to phase out when total qualifying equipment purchases exceed $4.09 million during the year. The amount a business can claim is also limited by taxable income from active business operations.
Qualifying equipment purchases may be eligible for a Section 179 deduction even when financed, provided the equipment is purchased and placed in service during the tax year. For example, a calendar-year business claiming the deduction for 2026 must have the purchased equipment delivered and available for use by December 31, 2026. A purchase order or invoice alone may not be enough. Consult your tax advisor to determine eligibility for your operation’s specific situation.
How Much Could Section 179 Save Your Business?
Section 179 reduces taxable income rather than the equipment’s purchase price or the company’s tax bill. For example, assume a business purchases a qualifying forklift for $50,000 and can deduct the full cost under Section 179. At an estimated combined tax rate of 35%, the potential tax savings would be approximately $17,500. Actual savings will depend on the company’s tax rate, taxable income, equipment eligibility, and other factors. The Section 179 deduction calculator can provide an initial estimate.*
Depending on your company’s circumstances, other first-year depreciation incentives may also be available. A qualified tax professional can help determine whether Section 179, bonus depreciation, or a combination of both may provide the greatest tax benefit.
When to Plan Your Forklift Purchase
Waiting until the final weeks of the year to purchase a new or used forklift may leave too little time to have it delivered and placed in service in time to qualify for a Section 179 deduction. Planning your purchase in the fall ensures you have access to available inventory and ample time for delivery.
The experts at Shoppa’s can guide you through equipment selection and purchase options. Contact us to discuss your equipment needs before the year starts winding down.
*The content here is for informational purposes only and is not tax advice. Consult a qualified tax or accounting professional to confirm your eligibility and calculate any potential deduction.
