Customer Information Regarding IRC Section 179 Deduction
Section 179 is an attractive tax deduction for small and medium businesses. It allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy a piece of qualifying equipment, you can deduct the full purchase price from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.
Assumptions
- 100% business use of your Bowlus
- You are under the $2,560,000 deduction limit
- You are under the $4,090,000 Section 179 spending cap
- You are in the top federal tax rate (37%)
- You depreciate the Bowlus 100% in the first year
Estimated Federal Tax Savings
The following estimates assume 100% business use, under the $2.5M deduction limit and $4M spending cap, in the top federal tax rate (37%) with full first-year depreciation.
| Bowlus Cost | Estimated Federal Tax Savings |
|---|---|
| $150,000 | $55,500 |
| $200,000 | $74,000 |
| $250,000 | $92,500 |
| $300,000 | $111,000 |
Some states, such as New Mexico, also conform to federal Section 179. If you are in the highest state income-tax bracket (5.9%), you could see additional savings up to $17,000 on top of the federal tax savings shown above.
Consult your own tax and accounting advisors regarding whether a tax credit is available to you. Bowlus does not provide tax, legal, or accounting advice.
Section 179 at a Glance for 2026
2026 Deduction Limit: $2,560,000
2026 Spending Cap: $4,090,000
Bonus Depreciation: 100% made permanent under the One Big Beautiful Bill Act of 2025
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction, the equipment must be financed or purchased and put into service between January 1, 2026 and December 31, 2026.
For 2026, $4,090,000 is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar-for-dollar basis, until $6,650,000 is reached. This spending cap makes Section 179 a small-business tax incentive because larger businesses that spend more than the cap on equipment don’t get the deduction.
Bonus Depreciation is generally taken after the Section 179 spending cap is reached and is available for both new and used equipment.
What Is the Section 179 Deduction?
Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the full purchase price from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.
How Section 179 Works
In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation — for example, if your company spent $50,000 on a machine, it might write off $10,000 per year for five years (these numbers are illustrative only).
Most business owners prefer to write off the entire equipment purchase price for the year they buy it — and that’s exactly what Section 179 does. It allows your business to write off the entire purchase price of qualifying equipment for the current tax year.
Limits of Section 179
For most small businesses, the entire cost of qualifying equipment can be written off on the tax return.
This deduction is available for both new and used equipment. To qualify, the equipment must be financed or purchased and placed into service within the applicable tax year. There is a maximum spending threshold on qualifying equipment, after which the deduction begins to phase out on a dollar-for-dollar basis. Bonus Depreciation can be applied after the deduction threshold is reached and is available for both new and used equipment for additional immediate expense of qualifying assets.
Who Qualifies for Section 179?
All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2026 should qualify for the Section 179 Deduction. Most tangible goods used by American businesses, including business-use vehicles like the Bowlus Endless Highways and Bowlus Rivet, qualify for the Section 179 Deduction.
Vehicles That Qualify
Bowlus offers several travel trailers that may qualify for Section 179 Tax Deduction. IRS Publication 946 states the maximum expense deduction for an SUV over 6,000 pounds is $32,000 for 2026*.
Bowlus does not meet the IRS definition of a heavy sport utility vehicle (as it is not a “4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways”). Therefore, the gross vehicle weight requirements of between 6,000 lb and 14,000 lb do not apply — and neither does the $32,000 limit. By contrast, a Class-B RV with Sprinter Van Chassis can only deduct up to $32,000.
Difference Between Section 179 and Bonus Depreciation
The most important difference is that both new and used equipment qualify for the Section 179 Deduction (as long as the used equipment is “new to you”), while Bonus Depreciation covered new equipment only until the most recent tax law passed. The bonus depreciation now includes used equipment. Under the One Big Beautiful Bill Act (Pub. L. 119-21), 100% bonus depreciation is also now permanent for qualifying property acquired after January 19, 2025, eliminating the prior phase-down schedule.
“More Than 50 Percent Business-Use” Requirement
The vehicle(s) must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Multiply the cost of the vehicle(s) by the percentage of business use to arrive at the amount eligible for Section 179.
Financing
If you plan on financing your Bowlus through your business, you should work with your own personal lending relationship. Bowlus’ recommended lender is only able to do personal RV lending.
Other 2026 Tax Law Shifts That Matter for Business Buyers
The One Big Beautiful Bill Act of 2025 (Public Law 119-21, signed July 4, 2025) made several other changes that affect Bowlus business buyers beyond Section 179 itself. The items below are summarized for orientation only and should be reviewed with your tax advisor.
1. Permanent 100% bonus depreciation. OBBBA §70301 reset IRC §168(k) to 100% permanently for qualifying property acquired after January 19, 2025. This eliminates the TCJA phase-down (which would have dropped bonus to 40% in 2025 and 20% in 2026). The result is that the Section 179 election plus bonus depreciation continues to allow full first-year expensing of a Bowlus placed in service in 2026, with no urgency premium tied to a phase-out cliff. IRS Notice 2026-11 (January 14, 2026) provides interim guidance preserving written-binding-contract acquisition rules.
2. Permanent $15 million estate and gift tax exemption. Effective January 1, 2026, OBBBA §70106 sets the unified estate, gift, and GST exemption at $15 million per individual ($30 million for married couples), permanent and indexed for inflation from 2027 forward. The top transfer tax rate remains 40%, and step-up in basis at death is preserved. A Bowlus held inside an LLC or trust can be gifted using minimal exemption while the owner retains business-use deductions during their lifetime.
3. State non-conformity, especially California. California has not conformed to OBBBA. The California §179 cap remains $25,000, with phase-out starting at $200,000, and California does not allow federal bonus depreciation at all. A California buyer of a $250,000 Bowlus can deduct the full purchase price federally but only $25,000 at the state level, with the remaining $225,000 depreciated over five years for California purposes. Texas, Florida (individuals), Wyoming, Nevada, and South Dakota impose no individual income tax. Florida decouples its corporate income tax from federal bonus depreciation. New Mexico, a rolling-conformity state, follows federal §179 with a 5.9% top individual rate for 2026.
Important Disclaimer
This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. The availability and amount of the tax credit associated with the purchase of your Bowlus is subject to certain criteria and eligibility requirements. You should consult your own tax and accounting advisors regarding whether a tax credit is available to you. Bowlus does not provide tax, legal, or accounting advice.
Related Tax Code & Resources
IRC Section 280A(f)(1)(a).
Prop. Reg. §1.280A-1(c)(1).
IRC §179, §168(k), §163(j), §199A, §280F, §2010
One Big Beautiful Bill Act, Pub. L. 119-21 (July 4, 2025), §§70101, 70105, 70106, 70301, 70302, 70306
Rev. Proc. 2025-32 §§4.24 and 4.25 (2026 inflation adjustments)
Rev. Proc. 2026-15 (2026 §280F luxury auto depreciation caps)
IRS Notice 2026-11 (post-OBBBA bonus depreciation guidance)
IRS Publication 946 (March 13, 2026 edition)
Treas. Reg. §1.179-1, §1.168(k)-2, §1.280F-6, §1.274-5T
Rev. Proc. 87-56 (MACRS Asset Class 00.27, Trailers and trailer-mounted containers, 5-year recovery)