Build Your Biggest Bonus—Leverage Bonus Depreciation with CAT

Thinking about investing in heavy machinery for your business? Then you need to know about the recent updates to Section 179 and bonus depreciation. It allows you to keep more of your money so you can grow your business better and faster.

The One Big Beautiful Bill Act (OBBA) was passed on July 4, 2025 and featured significant updates to the US tax code—including Section 179 bonus depreciation deductions for 2025. These updates offer substantial opportunities for tax savings that you don’t want to miss. Keep reading to learn what has changed and how you can cut your tax with CAT.

What is Section 179 vs. Bonus Depreciation?

Section 179 and bonus depreciation deductions let businesses keep more of their money when they make investments in their infrastructure. Here’s how it works:

• Section 179 and bonus depreciation allow businesses to deduct the full price of qualifying equipment or technology the year they buy it, instead of spreading out the deduction over a number of years.
• Eligible property includes “machinery and equipment purchased for use in a trade or business,” according to the IRS website.
• The new depreciation benefits created by the OBBA apply to qualified assets placed in service on or after January 20, 2025.
• Section 179 has a maximum deduction amount of 2.5 million and will phase out when total assets purchased exceed $4 million.
• Section 179 and bonus depreciation can be used in combination to maximize your company’s depreciation deduction. Generally, Section 179 is applied first, followed by bonus depreciation on any remaining basis.

What Does Section 179 and Bonus Depreciation Mean for My Business?

With Section 179 and bonus depreciation, you can lower your taxable income right away, which can save you a lot on taxes. Here’s a quick run-down on what it means for your business when you purchase Caterpillar equipment:

• Tax implications: You can immediately deduct the cost of heavy machinery with a combination of Section 179 and bonus depreciation as long as your machines are assembled and ready to use by Dec. 31, 2025.
• Increased cash flow: These deductions are meant to free up cash flow for your business that you can reinvest in your growth.
• Ability to grow fleet: These updates create a window of opportunity for your business. Major tax savings and freer cash flow make it more affordable to invest in equipment that can let you do bigger jobs faster.

How Do I Take Advantage of Section 179 and Bonus Depreciation?

You can take advantage of these tax savings through a mix of smart purchases, paperwork, and recordkeeping. Here’s what you need to know:

• Qualifying equipment for Section 179: Any equipment you purchase must be used for your business at least 50% of the time and be work-ready before Dec. 31, 2025.
• Detailed records: Keeping detailed records is a must. Be sure to keep meticulous records that include information about the machine cost, its use, and the date it was placed in service.
• IRS Form: Businesses (or their tax preparer) must fill out IRS Form 4562 otherwise called, “Depreciation and Amortization,” in order to claim their tax benefits.
• Contact Yancey: Work with one of our Yancey reps. We can help you purchase quality equipment and take advantage of these new tax benefits.

For a comprehensive breakdown on how to take advantage of Section 179 and bonus depreciation, check out IRS Publication 946.

Accelerate Your Tax Savings with Cat

Now is a great time to maximize your heavy equipment tax write-offers for 2025. Seize this incredible window of opportunity to accelerate your growth. Find a local Yancey Rep and start investing in your business today.