What Is Section 179 and How Does It Help Me?

What Is Section 179 and How Does It Help Me?

Do you know what Section 179 is? Section 179 is a special tax incentive you can use to buy medical equipment. In 2026, Section 179 lets medical companies write off up to $2,560,000.00 (a $60,000.00 increase from last year) in taxes. The total cost of eligible equipment for this incentive is $4,090,000.00; once a business spends more than that in a year, the deduction shrinks dollar for dollar (this is called the phase-out). For more information on this law, visit the Section 179 website.

How does it work?

Section 179 lets businesses deduct the full purchase price of qualifying equipment or software purchased or financed in a tax year. Instead of depreciating equipment over several years, companies can deduct the entire cost in the year it’s bought or leased. This incentive encourages businesses to invest in equipment and technology, benefiting both companies and the economy.

For example, over five years, a $20,000 machine might be deducted as $4,000 annually. With Section 179, businesses can deduct the full $20,000 in the year of purchase, significantly improving cash flow.

Bonus Depreciation:

Bonus depreciation is another tool businesses can use to accelerate depreciation deductions by automatically applying a set percentage to all qualifying assets, with no spending cap. For 2026, bonus depreciation remains at 100%. The One Big Beautiful Bill Act, signed in July 2025, made 100% bonus depreciation permanent for qualifying equipment acquired after January 19, 2025 (it had dropped to 60% in 2024 and was scheduled to fall to 40% in 2025). This provides flexibility to manage net operating costs. It’s ideal for significant investments that exceed the Section 179 limits. Using both Section 179 and Bonus Depreciation before 2026 ends can be a great financial tool for saving money during tax season.

Bonus Depreciation vs Section 179: 

Since 2025, both overlap: each lets you deduct 100% of qualifying equipment in the first year. That was not always the case. In years when bonus depreciation wasn’t 100%, you could use it only on a set percentage of qualifying expenses. For example, in 2024, the rate was 60%, meaning that once businesses reached the Section 179 cap, they could only depreciate 60% of the remaining balance in the first year.

Main differences:

• Section 179:
  • Defined maximum deduction ($2,560,000.00 in 2026)
  • Phase-out once total equipment purchases exceed $4,090,000.00
  • Limited to your business taxable income and cannot generate a loss.
  • Choose which qualifying assets to deduct.
  • Covers some building systems (roofs, HVAC, fire and security systems) that bonus depreciation does not.
  • Special provisions for vehicles and software

• Bonus Depreciation:
  • No dollar limit and a 100% deduction allowance on qualifying expenses.
  • Applies automatically unless you opt out, and opting out applies to an entire category of equipment (for example, all 5-year equipment).
  • Can create or increase a net operating loss.

Two important details about Section 179:

• Immediate Deduction: Businesses can deduct the full purchase price of qualifying equipment on their current tax return (up to $2,560,000.00 for 2026).
• Eligibility: Equipment must be purchased or financed and placed in service (delivered, installed, and ready to use) during the tax year, and used for business. Both new and used equipment qualify, as long as it is new to you.

Benefits for Medical Facilities:

Medical providers can leverage Section 179 to upgrade or expand their equipment inventory. They can acquire capital medical equipment, such as patient monitors, ventilators, or surgical tables, while maximizing tax savings.

Types of Capital Medical Equipment

We offer a wide range of medical equipment. Soma Technology can outfit surgical centers, operating rooms, emergency rooms, clinics, and most equipment found in physicians’ offices. To browse our complete list of capital medical equipment, click here. Some of our popular product categories include ICU Equipment, C-arms, ultrasounds, stretchers, surgical tables, anesthesia machines, heart/coolers, NICU equipment, patient monitors, infusion pumps, tourniquets, ventilators, and many more.

Common Questions

• What is the phase-out? If your business puts more than $4,090,000.00 of equipment into service in 2026, your Section 179 limit drops by $1 for every $1 over that amount. It reaches $0 at $6,650,000.00. Most clinics and physician offices will never reach it.
• What if I choose not to use bonus depreciation? You depreciate the equipment over its useful life instead, about 5 years for most medical equipment and computers and 7 years for furniture. Because of IRS timing rules, a 5-year item is actually spread across 6 tax returns.

Requesting Capital Medical Equipment From Our Sales Team

Our sales representatives are all highly versed in capital medical equipment. We can help with expansion projects, hospitals, clinics, surgery centers, and DeNovo projects. Click here to find the sales representative that serves your region. Each sales rep can be reached at 1-800-438-7662 or by their direct line. They can also be emailed at soma@somatechnology.com. Call today, or email for a quote within 24 business hours!

Final Thoughts

Are you interested in taking advantage of this tax incentive? As a reminder, the deadline to engage in this program is December 31st, 2026.