What to Know About Section 179 and How to Support Your Farmer Customers

At the end of the year, your customers may be securing equipment, whether purchased, leased, or financed, with Section 179 as a tax-saving strategy for their farm business operation.

With the right knowledge about Section 179, you can position yourself as a valuable resource for your customers as they seek year-end solutions to optimize their tax outcomes. Understanding how this tax benefit affects equipment purchases allows you to engage customers more effectively, and by pairing this insight with tools like Anvil Pro, your dealership can streamline communications, tracking, and customer support to build long-term relationships.

Section 179 of the Internal Revenue Code permits businesses to expense the full purchase price of qualifying equipment and software bought within the tax year and acquired for business use.

Farmers often take advantage of this tax incentive to upgrade or replace machinery and technology. The provision applies to equipment that is “new to the buyer,” accommodating both brand- new and used machinery.

The 2024 maximum Section 179 expense deduction is capped at $1,220,000 and also limits a capital purchase to $3,050,000.

You can use an online Section 179 Calculator to understand the opportunity for savings your customers may have when making purchasing decisions.

As an example, if a farmer buys a tractor at a cost of $115,000, in a tax bracket of 35%, and if they can deduct the full amount, it results in cash savings of $40,250. In this scenario, the final cost of equipment after the tax savings is $74,750.

Section 179 outlines that this bonus depreciation amount is only 60% for qualified property acquired after Sept. 27, 2017, and placed in service after Dec. 31, 2023, but before Jan. 1, 2025. This percentage will be decreased to 40% in 2025 and 20% in 2026.

Property with a long production period placed in service after Dec. 31, 2023, and before Jan. 1, 2025, is eligible for a special depreciation allowance of 80%.

Understanding this diminishing benefit can allow your customers to make even more strategic, long-term year-end purchases.

When your customers reach out, they’re likely evaluating purchases through both a financial and operational lens. By offering timely guidance and leveraging a comprehensive dealership intelligence platform like Anvil Pro, you strengthen the relationship and become a true business partner. Here’s how to maximize your value to customers:

Anvil Pro enables you to maintain detailed customer profiles that include purchase history, demographic information, and equipment preferences. With this insight, you can tailor your engagements and offer specific models or financing options that align with each customer’s needs, increasing conversion rates and building positive engagement.

Access the profiles in the context of your customers’ entire journey while in a single, unified view, reducing response times and enabling seamless support. By being prompt and well-informed, you can enhance customer satisfaction, which encourages long-term loyalty.

By leveraging Anvil Pro, you can anticipate when your customers may benefit from purchases, such as the end-of-year opportunity with Section 179 deductions and bonus depreciation. Proactive guidance not only positions you as an industry expert but also ensures your customers get the most value out of their purchasing decisions.

Taking advantage of Section 179 may come together quickly for your customers. Being ready to meet their needs when they reach out is critical but it’s even better to be prepared. Help your customers early by having a conversation about their plans so that they are ready to act on the right piece of equipment at the right time.

Messenger, the built-in texting feature in Anvil Pro is available to use in the Dealer CRM to streamline your communication. Use it for MMS and SMS text messaging, which enhances engagement and can be used to target segments of customers based on their history of equipment purchases or other demographic information.

For dealerships seeking to elevate their service, Anvil Pro provides a solution that goes beyond transactional interactions. The platform’s integrated capabilities allow you to monitor customer activity, evaluate past purchases, and recognize future needs — all while improving the efficiency and effectiveness of your dealership operations.

You can become an invaluable partner by being aware of Section 179 eligibility and being able to quickly support smart decision-making, enhancing customer relationships, and fostering a stronger future with actionable data and insights.