New 100% Bonus Depreciation for Farm Equipment
Authored by: Kevin Block — Partner, CPA | Date Published: March 20, 2026
If you’ve been filing farm returns over the past few years, you already know the frustration. Bonus depreciation, that simple tool that lets you write off equipment purchases immediately, started disappearing. First, it dropped to 80%. Then 60%. Then 40%. Every year, a little more of that deduction slipped away, and a little more of your hard-earned money headed toward the IRS instead of going back into your operation. There wasn’t much you could do about it.
But now things are different. As of early 2025, Congress reversed course with changes that will affect your farm. 100% Bonus Depreciation is back, and it could make 2026 a year to strategically invest.
As an accountant who works closely with agribusiness clients, I know you’d rather put that money into some new equipment than write a check to the federal government. And now it’s easier than it’s been in years to do exactly that.
Here’s what you should know.
What Are the Best Tax Deductions for Farmers in 2026?
For 2026, the best farm tax deductions are Bonus Depreciation and Section 179. 100% Bonus Depreciation has been fully restored, meaning any qualifying equipment, new or used, and placed in service after January 19, 2025, can be written off entirely in the first year. No more waiting for the full benefit. If you buy the equipment, you get the deduction now. Section 179 is also upgraded, with a $2.5 million cap, which is double the previous limit. Giving even large-scale operations more flexibility to deduct equipment purchases upfront.
Does It Matter When I Buy Farm Equipment for Tax Purposes?
When it comes to maximizing your 2026 deductions, timing is everything. There’s a common trap that catches farmers. Just buying equipment isn’t enough to claim the deduction. The IRS requires that the equipment be placed in service by December 31, 2026. If you order equipment in October and a supply chain delay pushes delivery into next year, you’ve just lost your 2026 deduction, no matter when you paid for it. With unpredictable lead times on major equipment, it’s worth planning for now, instead of at the end of the year.
Alternatively, if you purchased qualifying equipment after January 19, 2025, and haven’t filed yet, you may be eligible to claim the full 100% bonus depreciation on that purchase. A conversation with your accountant before you file could help you keep more of your money.
How Much Can a Farmer Actually Save on Taxes in 2026?
The clearest way to explain how much you can save is with a real example. Buy a $250,000 tractor and put it to work before December 31, 2026. In the past, you’d spread that cost over several years through depreciation and wait years to see the full tax benefit. Under the 2026 rules, you can deduct the entire $250,000 from this year’s farm income. For a producer in the 24% tax bracket, that’s about $60,000 in tax savings in one year.
Heavy pickup trucks with a Gross Vehicle Weight Rating over 6,000 lbs. may also qualify for bonus depreciation and Section 179. Most three-quarter-ton and one-ton work trucks make the cut, so they’re eligible for the same immediate write-off as large equipment. If you’ve been using a new diesel pickup on your ranch this year, be sure to claim it at tax time.
Should Every Farmer Take 100% Bonus Depreciation in 2026?
Here’s where working with an accountant can really make a difference. Most producers assume that if you can take 100% depreciation, you should. But that’s not always true. If 2026 turns out to be a lower-income year for your operation, taking the full deduction now might deliver less value than you’d expect. If you’re anticipating higher income in 2027 or beyond, it may be a better strategy to spread depreciation out and let those deductions land in a year where they offset a larger tax bill.
There’s also a key difference between Section 179 and Bonus Depreciation. Section 179 can reduce your tax liability to zero, but it can’t create a Net Operating Loss (NOL). Bonus Depreciation, on the other hand, can generate an NOL that carries forward to offset future income. The best approach depends on your current and expected income.
What Should Farmers Do Right Now to Maximize Their 2026 Tax Savings?
100% Bonus Depreciation is back. The Section 179 cap is doubled. Retroactive eligibility for equipment already purchased. For the first time in years, the tax code is working in your favor. If you’re considering a new piece of equipment, 2026 gives you the tools to maximize your tax savings.
But to take full advantage, you need a plan. The biggest benefits will go to those who review their projected income and act early. Placed-in-service deadlines are strict, and supply chain delays won’t wait for your tax strategy. The timing of your purchase could mean thousands in savings or missed opportunities.
Don’t wait until year-end to call your accountant. Our experienced team at MBE CPAs can review your income projections, plan your equipment purchases, and time deductions for maximum impact.