At Montesano Bros., we take pride in continuously investing in our people, our capabilities, and our equipment. Staying ahead in the construction industry requires not only skill and dedication but also the right tools for the job. One of the ways we are able to maintain and upgrade our fleet is by taking advantage of two important provisions in the IRS tax code: Section 179 and Section 168(k) Bonus Depreciation.
These provisions are designed to encourage business investment by allowing companies to deduct the cost of qualifying equipment purchases more quickly. Instead of spreading depreciation over several years, businesses can write off all or most of the cost in the same year the equipment is placed into service.
What is Section 179?
Section 179 of the IRS Tax Code allows businesses to deduct up to $1.22 million of qualifying equipment purchases in 2025. This deduction applies to both new and used equipment, as long as it is purchased and put into service during the same tax year. The deduction begins to phase out after a company spends more than $3.05 million on qualifying assets in a single year.
For companies like ours, Section 179 provides an immediate financial benefit. We can invest in the machinery we need now and recover a significant portion of the cost through tax savings, which helps us reinvest into more projects and more opportunities for our employees.
What is Section 168(k) Bonus Depreciation?
Section 168(k), commonly known as Bonus Depreciation, works alongside Section 179. This provision allows a business to deduct 100 percent of the purchase price of qualifying new or used equipment in the first year it is placed into service. There is no cap on the total amount of qualifying purchases, making it a valuable option for companies making large-scale investments.
One of the key advantages of Bonus Depreciation is that it can be used after Section 179 deductions have been applied. This means if your business purchases exceed the Section 179 limits, you can still deduct the remaining amount through Bonus Depreciation.
How Montesano Bros. Benefits
Over the years, these tax provisions have allowed us to refresh and expand our fleet of approximately 160 equipment assets. This keeps us competitive, efficient, and ready to handle a wide range of projects with precision and speed.
Most recently, we have added two powerful machines to our fleet:
CAT 655 Paver – This new paver comes equipped with advanced technology and features that allow our crews to complete paving projects with greater precision and efficiency than ever before.
CAT D6T Dozer – Recognized as the most powerful and efficient in its class, our D6T includes a 3-way blade, a ripper attachment, and a Trimble 3D GPS unit. This GPS technology allows operators to create slopes, cuts, and fills with exact precision, significantly improving accuracy and productivity.
Why This Matters for Our Clients
These investments are not just about having the latest machines. They directly impact the quality, efficiency, and reliability of the work we deliver to our clients. With the help of Section 179 and Bonus Depreciation, we can modernize our fleet more frequently, reduce downtime, and complete projects faster without compromising on quality.
We believe that when we invest in our equipment, we are investing in the future of our company, the satisfaction of our clients, and the safety and productivity of our crews.
If you are a business owner looking to expand or upgrade your equipment, it may be worth speaking with your accountant about how Section 179 and Section 168(k) Bonus Depreciation can benefit your operation.
