The same call comes in every year around the second week of December. An owner has found the machine, wants it written off this year, and needs to know if we can fund it before the 31st.
Sometimes we can. Often the equipment is six weeks out from the factory, and the deduction moves to next year.
"Placed in Service" Is Not the Same as "Purchased"
This is the distinction that catches people. The IRS treats property as placed in service when it is ready and available for a specific use. Publication 946 gives the example of a machine delivered one year but not installed and operational until the next. It counts in the second year.
Signing a purchase order in December doesn't do it. Paying for the equipment in December doesn't do it either. The asset has to be sitting there, ready to work, before your tax year closes.
Section 179 and Bonus Depreciation, Briefly
Section 179 lets a business expense qualifying equipment in the year it's placed in service rather than depreciating it over several years. For tax years beginning in 2026, the IRS caps that deduction at $2,560,000, reduced dollar for dollar once qualifying property placed in service exceeds $4,090,000.
Bonus depreciation is a separate first-year allowance, generally 100% for qualified property acquired and placed in service after January 19, 2025. Whether either applies to your purchase, and in what order, is a conversation for your CPA.
Why October, Not December
Add up the actual steps. Credit approval and documentation. A build slot or dealer availability. Freight. Then installation, rigging, calibration, or inspection. Any one of those can consume three to six weeks.
December is also the most crowded month in equipment finance. ELFA's index has long shown a typical end-of-quarter, end-of-year spike in new business volume, so underwriters, dealers, and installers are all working the same compressed calendar you are.
Financing Does Not Disqualify You, But Structure Matters
You generally don't have to pay cash to claim the deduction. What matters is that you are treated as the owner for tax purposes and the equipment is in service in time.
That's where structure comes in. We write equipment finance agreements, $1 buyout leases, fair market value leases, and TRAC leases. Ownership-style structures like an EFA or a $1 buyout are commonly treated as purchases. A true FMV lease generally isn't, because the lessor holds ownership and takes the depreciation while you deduct the payments. Settle that with your accountant before you sign, not after.
Working Backward From December 31
- Now through mid-October: call your CPA, collect equipment quotes, confirm vendor lead times
- Mid-October: submit a pre-approval so funding is never the bottleneck
- Late October into November: issue the purchase order, lock the build or delivery slot
- November into early December: take delivery, install, commission
- Before December 31: equipment ready and available for its intended use
What to Gather Now
- An equipment quote or invoice
- Three months of business bank statements
- A written lead time from your vendor
That's the whole pre-approval package, and it runs a soft credit inquiry. Haven't picked equipment yet? Apply anyway, and we will tell you what you qualify for.
The Funding Booth provides financing, not tax advice. Nothing here determines your eligibility or deduction amount, so confirm both with a qualified tax professional.
Get pre-approved now, so when your CPA says go, the only thing left is delivery. Call (888) 551-0215 to talk through your timeline.
