Running a farm today means balancing passion for the land with smart financial decisions. At AgQuest Financial, we walk alongside you, helping you plan not only for the season at hand but also for the long-term health of your operation. One important tool for farmers this year is the updated Section 179 limit for 2025, which brings meaningful changes designed to help you invest in your operation with confidence.
Bonus Depreciation: A Permanent Advantage
The recently passed One Big Beautiful Bill Act (OBBBA) made 100% bonus depreciation a permanent fixture.
Beginning January 19, 2025, any qualifying asset placed into service can be fully depreciated right away. Instead of spreading deductions over several years, you can recover the cost of equipment immediately and strengthen cash flow when it matters most.
Bonus depreciation can be especially valuable for certain types of purchases, such as fixtures, and ensures flexibility beyond what Section 179 provides.
Section 179 Deduction: Increased to $2.5 Million
Another major change is the boost to the Section 179 deduction limit for 2025, now set at $2.5 million (up from $1.22 million last year), with a phase-out beginning at $4 million. For most farmers, this means nearly all equipment purchases can be fully deducted in the same tax year.
For Minnesota farmers, there’s additional good news: the state previously increased its deduction from $25,000 to $200,000, with the rest added back to Minnesota taxes and then reduced over three years.
If purchases exceed the $2.5 million cap, the 100% bonus depreciation ensures the rest can still be written off.
What This Means for Your Farm
Together, these updates give you greater flexibility and peace of mind when making big investment decisions. Whether upgrading a combine, adding precision ag technology, replacing trucks, or investing in fixtures, these provisions allow you to make bold moves without the long wait to realize tax benefits.
It’s also worth noting that these provisions represent a positive shift, expanding opportunities for farmers rather than reducing them.
AgQuest is Here to Help
At AgQuest, we believe in helping you live and leave a legacy. That means more than just offering financial products. It means partnering with you to make the most of opportunities like the new Section 179 limit and bonus depreciation for 2025.
If you are planning equipment purchases this year, let’s talk through how these changes can benefit your operation.