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How Farmers Can Save With Section 179 in 2025

As the year winds down and harvest wraps up, many farmers start looking for ways to reduce their tax burden and prepare for next season. One of the most powerful tools available right now is Section 179, and with updated limits under the One Big Beautiful Bill Act, it’s more valuable than ever for agricultural operations.

At Rexco Equipment, Inc., we work with farmers across Iowa who use Section 179 to update their machinery, improve efficiency, and protect their bottom line. Below, we break down what farmers need to know and how this deduction can make a real difference before December 31.

What Section 179 Means for Farmers

Section 179 allows businesses, including farms, to deduct the full purchase price of qualifying equipment the same year it’s placed into service. Instead of depreciating machinery over several years, farmers receive the tax benefit immediately.

Key benefits for agricultural operations include:

• Immediate tax savings for high-income years

• Applies to new OR used equipment as long as it’s new to your operation

• Improves cash flow heading into winter and spring

• Helps you upgrade equipment you rely on daily

This makes Section 179 one of the most impactful tax tools available to farmers, especially during years with tight margins or rising costs.

2025 Section 179 Limits Farmers Should Know

Recent updates under the One Big Beautiful Bill Act raised the deduction limits significantly:

• Maximum deduction: Up to $2.5 million

• Spending cap before phase-out: $4.0 million

As long as your total qualifying purchases stay under that cap, you may be able to deduct the full equipment expense — a major advantage for operations looking to upgrade multiple machines.

Why Section 179 Is Especially Valuable for Farmers

1. Reduce Taxable Income in a Profitable Year

If market conditions, yields, or livestock sales created a strong year, Section 179 helps you lower tax liability by reinvesting in needed equipment.

2. Prepare Machinery for the Coming Season

Purchasing before year-end means starting winter and spring with reliable machines for:

• Feeding livestock

• Snow removal

• Manure handling

• Field maintenance

• Planting prep

3. Avoid Breakdowns During Critical Work Seasons

Older equipment tends to fail at the worst times. Upgrading now prevents downtime when timing matters most.

4. Used Equipment Still Qualifies

Many farmers prefer used or “new-to-you” machines. Section 179 still applies — giving you tax savings without new-equipment pricing.

Farm Equipment That Qualifies for Section 179

Most tangible equipment used in agricultural business operations qualifies, including:

• Skid-steers and compact track loaders

• Compact tractors and attachments

• Grapples, buckets, bale spears, augers, forks

• Compact excavators

• Trailers

• Property maintenance and chore equipment

If the machinery is used for active farm operations and placed into service before December 31, it likely qualifies.

Deadlines Farmers Can’t Afford to Miss

To qualify for Section 179 in the current tax year:

• Equipment must be purchased AND placed into service by December 31

• It must be used more than 50% for business

• Total qualifying purchases must remain below the $4.0M limit

Waiting too long can push your deduction into the next tax year or risk missing it altogether if inventory or delivery schedules tighten.

Take Advantage of Section 179 Before Year-End

Farmers who plan ahead save thousands and enter the new season with reliable equipment. Those who wait often miss the deduction or face inventory shortages. Make this the year you stay ahead of the deadline.

[Contact Your Rexco Equipment] location today or [View Our Inventory] to explore qualifying equipment and schedule your year-end purchase.

This article is for informational purposes only and is not tax or legal advice. Always consult your tax professional or accountant to confirm how Section 179 applies to your business.