Farmers and ranchers have a big opportunity to cut taxes before the 2025 year-end — thanks to major changes in recent tax legislation. 

The new law doubles Section 179 expensing limits and restores 100% bonus depreciation, giving ag operations more opportunities to write off equipment purchases immediately. If you’re planning to upgrade your hay and forage equipment, for example, these updates could potentially mean many thousands in savings — but only if you act before the deadline. 

What is Section 179 and how it applies to farmers and ranchers 

Section 179 of the Internal Revenue Code allows businesses — including farms and ranches — to deduct the full purchase price of qualifying equipment in the year it’s placed in service, rather than depreciating it over several years. This means farmers can claim a larger deduction upfront, reducing taxable income and improving cash flow. 

Qualifying purchases include tractors, combines, forage equipment, heavy-duty trucks, farm management software and certain building improvements like grain bins or livestock barns. 

Other key points to know: 

• Applies to new and used hay and forage equipment (as long as it’s new to your business) 

• The ag equipment must be purchased and placed in service during the tax year 

• Deduction cannot exceed taxable income, but unused amounts may carry forward 

Current deals on Vermeer hay and forage equipment

• Stackable coupons PLUS low-rate financing or cash back on vertical mixers, feed wagons and bale processors 

• $5,000 cash back or 0% financing for up to 36 months on 605N balers 

• 1.9% financing for up to 60 months or cash back on manure spreaders 

• Special offer on Vermeer 604-R series balers 

Background on the new tax bill and when changes take effect

The upcoming changes were into law on July 4 as part of the One Big Beautiful Bill. Most tax provisions, including Section 179 updates, apply to property placed in service in tax years beginning after Dec. 31, 2024, while 100% bonus depreciation applies to qualifying property placed in service after Jan. 19, 2025. 

The bill permanently restores 100% bonus depreciation and raises Section 179 limits to $2.5 million, with a $4 million phase-out threshold. 

What changed under Section 179? 

• Maximum deduction: $2.5 million (up from $1.25 million in 2025 after inflation adjustments) 

• Phase-out threshold: $4 million in total qualifying purchases 

• Inflation indexing: Limits will adjust annually starting in 2026 

• Applies to new and used equipment, as long as it’s new to your business 

Before the July updates, Section 179 limit was set at $1 million under the Tax Cuts and Jobs Act of 2017 but indexed for inflation — reaching $1.25 million by 2025. 

Bonus depreciation is back — and bigger 

The bill restores 100% bonus depreciation for qualified property placed in service after Jan. 19, 2025. This applies to tangible assets with a recovery period of 20 years or less, including farm machinery, vehicles and certain building improvements. 

Bonus depreciation is automatic and can be applied to new or used equipment, making it a powerful tool for farmers planning significant capital purchases. 

How it impacts ag equipment purchases 

For producers, these changes open the door to immediate tax savings on big-ticket items. Examples include: 

• Forage and feeding equipment: Qualifies under both Section 179 and bonus depreciation 

• Tractors and combines: Deduct the full cost in the year of purchase 

• Facility improvements: Certain nonresidential property upgrades, such as barns or parlors, may also qualify 

Planning tips for year-end hay equipment purchases 

• Consult your tax advisor: State conformity and entity-specific rules vary, so professional guidance is essential. 

• Place assets in service before year-end: Timing is critical to qualify for deductions. 

• Stack tax benefits with promotions: Combine Section 179 savings with ongoing Vermeer deals on hay and forage equipment for maximum impact. 

• Explore financing options: Flexible financing can help you manage cash flow while leveraging tax benefits. 

• Consider used equipment: Section 179 applies to both new and used equipment, as long as it’s new to your business. 

Bottom line: Don’t miss out on thousands in tax savings 

The Section 179 update aims to make it easier for farmers and ranchers to invest in forage equipment and reduce taxable income immediately. With higher Section 179 limits and restored 100% bonus depreciation, year-end purchases can deliver substantial tax savings — especially when paired with manufacturer promotions and smart financing strategies. 

Vermeer Corporation reserves the right to make changes in engineering, design and specifications; add improvements; or discontinue manufacturing at any time without notice or obligation. 

Equipment shown is for illustrative purposes only and may display optional accessories or components specific to their global region. 

Please contact your local Vermeer dealer for more information on machine specifications. 

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