Section 179 Deduction for Coffee Equipment: 2026 Guide
Section 179 of the U.S. tax code lets a business deduct the cost of qualifying equipment in the year it is placed in service, instead of depreciating it over several years. For tax years beginning in 2026, the maximum Section 179 deduction is $2,560,000. The deduction begins to phase out once a business places more than $4,090,000 of Section 179 property in service during the year. Commercial coffee equipment bought for business use, such as espresso machines and grinders, is generally the kind of property Section 179 covers.
Updated October 2026. Figures are from IRS Revenue Procedure 2025-32, IRS Publication 946, and IRS Notice 2026-11.
2026 Section 179 limits at a glance
| 2026 tax year | 2025 tax year | |
|---|---|---|
| Maximum Section 179 deduction | $2,560,000 | $2,500,000 |
| Phase-out begins (total Section 179 property placed in service) | $4,090,000 | $4,000,000 |
| Deduction fully phased out | $6,650,000 | $6,500,000 |
How does Section 179 work?
Normally, a business recovers the cost of equipment through depreciation, a deduction spread across the equipment's useful life. Section 179 lets you elect to deduct all or part of that cost in the first year instead.
For example, if your café buys an espresso machine in 2026 and places it in service for business use, you can elect to deduct its cost on your 2026 return. Your total Section 179 deduction has to stay within the dollar limit and the business income limit described below.
Does commercial coffee equipment qualify?
To qualify, property must meet three tests. It must be eligible property, acquired by purchase, and acquired for use in your trade or business.
Eligible property includes tangible personal property such as machinery and equipment. That category generally covers the equipment a coffee business runs on, such as espresso machines, grinders, brewers, and water filtration. Off-the-shelf computer software can also qualify. Your tax professional can confirm how a specific purchase is treated.
New or used: Section 179 does not require equipment to be new. It must be acquired by purchase, though. Property bought from a related person, such as a spouse, parent, or child, or from an entity you own more than 50% of, does not qualify.
Business use: The equipment must be used more than 50% for business in the year it is placed in service. Only the business-use share of the cost can be deducted. If business use later drops to 50% or less, part of the deduction may have to be recaptured as income.
What is the deadline to claim Section 179 for 2026?
Equipment must be placed in service during your 2026 tax year. For calendar-year businesses, that means by December 31, 2026.
The IRS treats equipment as placed in service when it is ready and available for its specific use, not when it is ordered or paid for. In the IRS's own example, a machine delivered in one year but not installed and operational until the next year counts as placed in service in the second year.
Espresso machines and other equipment often need delivery, installation, and water or electrical work before they can run. Ordering earlier leaves more room for shipping, installation, and setup before your tax year ends.
How much can you deduct?
Dollar limit: For 2026, the limit is $2,560,000.
- It drops dollar for dollar once your total Section 179 property placed in service passes $4,090,000, and reaches zero at $6,650,000.
- You don't have to claim the full amount, and you can split it among items however you choose.
Business income limit: Your Section 179 deduction can't exceed your taxable income from the active conduct of a trade or business for the year. Any amount you can't deduct because of this limit carries forward to the next year.
Section 179 and bonus depreciation
Bonus depreciation, the special depreciation allowance under Section 168(k), is a separate first-year deduction.
- Under the One Big Beautiful Bill Act, it is permanently set at 100% for qualified property acquired and placed in service after January 19, 2025.
- Qualified property can be new or certain used property.
- When both apply, bonus depreciation is taken after any Section 179 deduction and before regular depreciation.
Your tax professional can help you decide how to use each one.
Can financed equipment qualify?
Yes. The IRS considers you the owner of property even if it is subject to a debt. Equipment you buy with a loan or an equipment finance agreement can therefore qualify when it meets the other requirements.
Leases work differently. If you lease equipment and don't hold the incidents of ownership, you generally can't depreciate it. Some lease agreements are treated as purchases for tax purposes and some are not, so ask your lender and tax professional how your agreement is classified.
Voltage works with several financing partners. Explore financing options
Related reading: What To Know About Financing Commercial Coffee Equipment
How do you claim it?
Elect Section 179 in Part I of IRS Form 4562 and file it with your return for the year the equipment is placed in service. Keep records that identify each item, how and from whom you acquired it, and when you placed it in service.
Frequently asked questions
What is the Section 179 deduction limit for 2026?
For tax years beginning in 2026, the maximum Section 179 deduction is $2,560,000. It is reduced dollar for dollar when the total cost of Section 179 property placed in service during the year exceeds $4,090,000.
When does equipment need to be in service to count for 2026?
It must be placed in service during your 2026 tax year, which means by December 31, 2026 for calendar-year businesses. The IRS treats equipment as placed in service when it is ready and available for its specific use.
Do espresso machines qualify for Section 179?
Commercial espresso machines are machinery and equipment, which is generally eligible Section 179 property when it is purchased and used more than 50% for business. Your tax professional can confirm how a specific purchase is treated.
Does used equipment qualify?
Section 179 does not require equipment to be new. It must be acquired by purchase, and not from a related person.
Can I use Section 179 on financed equipment?
Financed equipment can qualify, because the IRS considers you the owner of property even if it is subject to a debt. Leases are treated differently, so ask your lender and tax professional how your agreement is classified.
Is Section 179 the same as bonus depreciation?
No. Bonus depreciation is a separate first-year deduction under Section 168(k). It is 100% for qualified property acquired and placed in service after January 19, 2025, and it is taken after any Section 179 deduction.
Questions about equipment for your shop?
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Sources: IRS Revenue Procedure 2025-32, IRS Publication 946, IRS Notice 2026-11
Voltage Coffee Supply does not provide tax advice. This page is general information based on IRS guidance as of October 2026. Talk to your tax professional about your situation.