Tax Savings · 2026 Limits
Section 179 & Bonus Depreciation
When you buy a refuse truck for your business, the IRS lets you deduct most or all of the cost from this year's taxes — instead of spreading the deduction across five or more years. For 2026, Section 179 and 100% bonus depreciation can deliver write-offs that dramatically lower the real cost of a new truck.
Buy. Deduct. Save.
Real-World Examples
What This Could Mean For You
Three illustrative scenarios at a 30.5% combined tax rate (25% federal + 5.5% state, 100% business use). Read on below for the plain-English breakdown of how Section 179 and bonus depreciation actually work. Your actual savings depend on your tax bracket, state, and business situation.
Purchase
$180,000
Single rear loader
Owner-Operator
Purchase
$540,000
Three trucks
Mid-Size Fleet
Purchase
$3,000,000
Large fleet refresh
Large Fleet
Plain English
What Is Section 179?
Section 179 of the IRS tax code is a write-off for businesses that buy equipment — including refuse trucks. Here's the 60-second version.
The Basics
Section 179
A first-year write-off that lets your business deduct the cost of equipment purchases up front instead of spreading it out over years.
Normally the IRS makes you deduct a truck's cost slowly — over five or more years. Section 179 lets you skip that and write off the full purchase price the same year you put it in service.
Why does this matter? Because deducting $180,000 from your business income today reduces your tax bill today — not five years from now. That's cash you keep, instead of cash the IRS keeps.
For 2026, your business can write off up to $2,560,000 in qualifying equipment purchases under Section 179. The deduction starts to phase out once your total purchases exceed $4,090,000, and disappears entirely above $6,650,000 — so it's designed for small and mid-size businesses, not massive corporations.
Quick Example
You buy a $180,000 refuse truck and use it 100% for business. Under Section 179, you can deduct the full $180,000 from this year's business income — instead of deducting about $36,000 per year over five years.
Plain English
What Is Bonus Depreciation?
Bonus depreciation is a separate write-off that works alongside Section 179. Same idea (deduct the cost up front), but different rules — and a big change in 2025.
The Basics
Bonus Depreciation
An additional first-year write-off that applies to whatever cost isn't already covered by Section 179.
After you've used your Section 179 deduction (up to the yearly cap), bonus depreciation lets you write off whatever's left of the truck's cost in the same year. As of 2025, that bonus rate is back to 100%.
For property acquired after January 19, 2025, the One Big Beautiful Bill Act restored bonus depreciation to 100%. That replaced the previous phase-down schedule, which had been scheduled to drop bonus to 40% in 2025, then 20% in 2026, then zero by 2027.
The practical effect: between Section 179 and 100% bonus depreciation, most refuse truck buyers can deduct effectively the entire purchase price of a truck (or a fleet) in the year they put it in service.
Key Difference From Section 179
Section 179 is capped at your business's taxable income — you can't deduct more than you made. Bonus depreciation has no income limit, so it can create or increase a net business loss that carries forward to future years.
The Order Of Operations
How They Work Together
You apply Section 179 first, then bonus depreciation, then regular depreciation. Here's how a $3,000,000 fleet purchase breaks down for 2026.
Total Equipment Purchase
$3,000,000
Step
1
Apply Section 179
Deduct up to the 2026 cap of $2,560,000. This covers the bulk of the purchase right away.
Step
2
Apply 100% Bonus Depreciation
Whatever's left ($3M − $2.56M = $440,000) gets fully deducted as bonus depreciation in the same tax year.
Step
3
Regular Depreciation On Any Remainder
After Steps 1 and 2, anything still on the books would go through standard MACRS depreciation over 5 years. With 100% bonus in effect, nothing is left over.
Total Year-One Deduction
$3,000,000
Effectively 100% of the purchase deducted in the year placed in service
The RDK Advantage
Why Refuse Trucks Get The Best Treatment
Not all vehicles qualify equally for Section 179 — the IRS imposes hard caps on cars, light trucks, and even some heavy SUVs. Refuse trucks escape every one of those caps.
Why It Matters
No Vehicle Cap
Every refuse truck on our lot qualifies for the full Section 179 deduction — no $30,500 or $32,000 vehicle limit applies.
The IRS divides vehicles into categories based on gross vehicle weight rating (GVWR). Refuse trucks all weigh in at over 14,000 lb GVWR — usually 33,000 lb or more — which puts them in the heavy commercial vehicle category with no Section 179 vehicle cap.
For reference, here's how the IRS categorizes vehicles for Section 179 purposes in 2026:
Light vehicles under 6,000 lb GVWR (most cars and small trucks) are capped at about $20,400 in combined first-year deductions.
Heavy SUVs and trucks between 6,001–14,000 lb GVWR that are primarily designed to carry passengers are capped at $32,000 in Section 179 deductions.
Vehicles over 14,000 lb GVWR or modified for nonpersonal use — including all refuse trucks — have no vehicle-specific cap. They can be fully deducted up to the overall Section 179 limit of $2.56M.
Bottom Line
An $80,000 SUV used for business gets capped at $32,000 in Section 179. An $80,000 grapple truck or rear loader gets the full $80,000 deduction. The difference adds up fast on a multi-truck purchase.
2026 Tax Year
The Numbers At A Glance
The key figures every refuse truck buyer should know going into 2026 tax planning.
$2.56M
Section 179 Maximum Deduction
$4.09M
Phase-Out Threshold
100%
Bonus Depreciation Rate
50%+
Required Business Use
Don't Skip This Part
Important Rules To Know
Section 179 and bonus depreciation are powerful tools, but they have specific rules. Get any of these wrong and you can lose the deduction or trigger recapture later.
Placed In Service By December 31
The truck must be delivered and put to work in your business by the end of the tax year. Ordering a truck in December but not taking delivery until January means the deduction shifts into the next year. Plan early to hit year-end deadlines.
More Than 50% Business Use
The truck has to be used more than 50% for business in the year you place it in service. If business use drops below 50% in a later year, the IRS can require you to recapture some of the deduction as income. For commercial refuse trucks this is almost never an issue.
Section 179 Income Limit
Section 179 deductions cannot exceed your business's taxable income for the year. If you elect more than your income can absorb, the excess carries forward to future tax years. Bonus depreciation doesn't have this limit and can create a net loss.
New & Used Trucks Both Qualify
Both Section 179 and bonus depreciation apply to new and used equipment — as long as the truck is "new to your business." That means you can buy an off-lease truck or a used unit from our inventory and still claim the full deduction.
Run Your Own Numbers
Tax Savings Calculator
Plug in your purchase price, business use percentage, and tax rates to see your estimated year-one deduction and tax savings. Defaults assume a $180,000 truck used 100% for business at the 2026 limits.
Section 179 Calculator
Estimate Your Savings
Adjust the inputs below to model different scenarios. Results update instantly.
Truck & Usage
Deductions
Tax Rates
Estimated Savings
Estimates only. Actual tax savings depend on your business income, structure, applicable deductions, and other factors. Always consult your CPA before filing.
Common Questions
Section 179 & Bonus Depreciation FAQ
What's the difference between Section 179 and bonus depreciation?
Both let you write off equipment purchases in the year you place them in service. The key differences:
Section 179 is capped at your business's taxable income for the year ($2.56M maximum in 2026) and you choose how much to elect each year. Any election above your income carries forward.
Bonus depreciation has no income limit and applies automatically (you can opt out, but you have to). For 2025 and beyond, the rate is back to 100% on qualifying property acquired after January 19, 2025.
You apply Section 179 first, then bonus depreciation to whatever cost remains.
Can I use these deductions on a used refuse truck?
Yes. Both Section 179 and bonus depreciation apply to new and used equipment, as long as the truck is new to your business (you didn't previously own it). Off-lease trucks, reconditioned trucks, and used inventory all qualify.
What if I finance the truck instead of paying cash?
Financed trucks still qualify for the full Section 179 and bonus depreciation. The IRS treats you as having "purchased" the truck when it's placed in service, regardless of how you paid for it. So you can deduct the full purchase price in year one even though you're only paying monthly payments — one of the most powerful aspects of Section 179.
This means many fleet operators can deduct more than they paid out of pocket in year one, generating a real cash benefit that's bigger than their actual cash outlay.
How does the Section 179 phase-out work?
For 2026, the Section 179 deduction starts to phase out dollar-for-dollar when your total qualifying equipment purchases exceed $4,090,000. For every dollar above that threshold, your $2.56M deduction is reduced by one dollar. The deduction is fully phased out once your total purchases hit about $6,650,000.
This is designed to limit Section 179 to small and mid-size businesses. If you're spending more than $6.65M on equipment, you'll rely entirely on bonus depreciation and regular MACRS depreciation.
What does "placed in service" actually mean?
"Placed in service" means the truck is ready and available for its intended business use. For a refuse truck, that typically means it's been delivered, titled, registered, and is operationally available to run routes — not still in a queue waiting to be built or upfitted.
If your tax year ends December 31, the truck has to be placed in service by that date to claim the deduction in the current year. Order early to leave time for build, delivery, registration, and any upfit work.
What happens if I sell the truck later?
If you sell a truck within its depreciation recovery period (5 years for most heavy equipment) and you took accelerated deductions via Section 179 or bonus depreciation, the IRS may treat part of the sale price as depreciation recapture — ordinary income subject to your regular tax rate.
This isn't a reason to avoid Section 179, but it is something to factor into long-term planning. Your CPA can model whether the timing of recapture offsets the year-one savings.
Why does the 100% bonus depreciation matter so much for 2026?
Before the One Big Beautiful Bill Act (2025), bonus depreciation was scheduled to phase down: 60% in 2024, 40% in 2025, 20% in 2026, and zero by 2027. That meant large fleets buying above the Section 179 cap would lose significant write-offs each year.
The 100% restoration changes that. For property acquired after January 19, 2025, you can deduct the full remaining basis as bonus depreciation — making 2026 one of the most favorable tax years for equipment purchases in over a decade.
Do I need to do anything special at the dealership?
No. RDK doesn't file your taxes, but we do make sure the paperwork supporting your purchase — invoice, sales agreement, delivery date, VIN — is clean and complete for your CPA. We can also help you time delivery to fall within your tax year if you're working toward a year-end deadline.
Talk to us early. The closer to December 31, the harder it gets to guarantee placed-in-service status before year-end.
Tax Disclaimer
RDK Truck Sales is a refuse truck dealer, not a tax professional, CPA, or financial advisor. All information on this page is general in nature, current to the best of our knowledge as of the 2026 tax year, and provided for informational purposes only. Tax law is complex and changes frequently. Section 179 limits, bonus depreciation rates, phase-out thresholds, vehicle classification rules, and recapture rules can all change based on legislation, IRS guidance, your business structure, your income, your state, and your specific circumstances. The calculator on this page produces estimates only and should not be relied on for tax filings or planning. Always consult a qualified CPA or tax professional before making purchasing decisions based on anticipated tax treatment.
Ready To Buy?
Talk To RDK About Your Year-End Purchase
Year-end deadlines come up fast. If you're considering a Section 179 purchase for the current tax year, the earlier you start, the more time we have to get a truck delivered and placed in service before December 31.