How 2025 Tax Incentives Could Benefit Businesses That Purchased Equipment This Year
As 2025 draws to a close, many businesses are reviewing their operations, wrapping up projects, and preparing year-end reporting. If your company purchased or leased new equipment this year, forklifts, aerial lifts, service vehicles, or warehouse systems, you may have access to valuable tax incentives that could help you reduce your taxable income and improve cash flow.
These programs are designed to encourage capital investment, and many businesses qualify without even realizing it. Now is the time to speak with your tax advisor to ensure you’re not missing out on savings.
U.S. Businesses: Section 179 and Bonus Depreciation
In the United States, the Section 179 deduction allows businesses to write off the full purchase price of qualifying equipment that was put into service during the tax year.
Key Highlights for 2025:
- Deduction limit: $2,500,000
- Phase-out threshold: $4,000,000 (fully phased out at $6,500,000)
- Bonus depreciation: 100% available after Section 179 is applied
- Eligible equipment: New and used business-use equipment, including forklifts, industrial vehicles, and certain software
- Vehicles over 6,000 lbs GVWR may qualify, with a cap of $31,300
- Equipment must have been put in service by December 31, 2025
These enhanced limits, updated under H.R.1, make 2025 one of the most advantageous years in recent memory for capital investments.
Canadian Businesses: Immediate Expensing and AIIP
Canadian companies have access to two complementary programs that can provide similar benefits:
1. Immediate Expensing
For Canadian-controlled private corporations (CCPCs) and eligible small businesses:
- Deduct up to $1.5 million in qualifying new or used (new-to-you) equipment
- Applies per associated group, not per company
- Equipment must be available for use before January 1, 2028
- Applies to most classes of depreciable property, excluding buildings
- No carryforward—deductions must be used in the year of purchase
2. Accelerated Investment Incentive (AIIP)
If your purchases exceed $1.5M or don’t qualify for Immediate Expensing:
- You can claim 1.5× the normal Capital Cost Allowance (CCA) in the first year
- The half-year rule is eliminated, allowing the full rate up front
- Applies to most capital assets acquired after November 2018 and in use before 2028
- Available to all business types
Used together, these programs allow businesses to deduct more of their investment up front, helping them recover costs faster and improve liquidity.
Why This Matters Before Year-End
If your business has already acquired equipment in 2025, it’s worth reviewing these programs now with your accountant. The window to apply these deductions to this year’s tax return closes December 31, and once the year ends, those opportunities could be lost.
Incentives like Section 179 and Immediate Expensing aren’t just technical tax tools; they’re business strategy levers. They allow companies to turn necessary capital investments into cash-flow advantages, freeing up working capital for other priorities.
And for companies who are considering last-minute additions to their fleet, these incentives can help justify pulling the trigger before year-end.
A Final Reminder
Tax incentives vary by country, business structure, and the type of assets you’ve purchased. This article is intended to raise awareness, not replace the guidance of a qualified tax professional. We strongly recommend reviewing your purchases with your accountant to confirm eligibility.
GFS has equipment available across North America and can help you expand your fleet quickly. If you need additional units before the year-end cutoff, now is the time to act.
This article is for informational purposes only and does not constitute tax or legal advice. Please consult your tax professional for guidance based on your business’s specific circumstances.