Section 179 and the De Minimis Safe Harbor: How Small Businesses Can Write Off Big Purchases
Buying new equipment or upgrading your office can feel expensive, but the right tax rules can make it a lot easier.
Two of the most powerful tools small business owners have are Section 179 and the De Minimis Safe Harbor election. Both let you write off equipment and supplies right away instead of slowly depreciating them over years.
Here’s how they work and how to use them to your advantage.
What Is Section 179?
Section 179 lets you deduct the full purchase price of qualifying business equipment and property in the year you buy it.
That means instead of spreading the cost out over five or seven years, you can deduct it all now and lower your taxable income immediately.
Examples of items that may qualify:
Computers and office equipment
Business vehicles
Machinery or tools
Furniture and fixtures
Software
For 2025, the Section 179 deduction limit is $1.22 million (adjusted yearly for inflation), which is more than enough for most small businesses.
Key point: The asset must be used more than 50% for business purposes and placed in service before year-end. So if you’re thinking about buying equipment, doing it before December 31 could save thousands in taxes.
What Is the De Minimis Safe Harbor Election?
The De Minimis Safe Harbor is a separate rule that lets you immediately expense smaller purchases without needing to capitalize or depreciate them.
Think of it as the “keep it simple” rule for everyday items.
You can typically write off:
Small tools or supplies
Office furniture under $2,500
Laptops or accessories
Business phones
Minor repairs or replacements
As long as each item costs $2,500 or less per invoice or item, you can deduct it in full the year you buy it.
Example:
You buy three office chairs for $400 each. Under De Minimis Safe Harbor, you can write off all $1,200 this year — no need to depreciate.
When to Use Each Rule
Use Section 179 when:
You buy large equipment or vehicles
You want a big deduction in one year
You’re profitable and want to lower taxable income
Use De Minimis Safe Harbor when:
You make frequent small purchases
You want simpler bookkeeping
You don’t want to track depreciation for every small asset
Both rules help keep your books cleaner and your tax bill lower.
How Your Bookkeeper Helps
Your accountant makes the election, but your bookkeeper keeps the records that make those deductions possible.
When your fixed assets and receipts are tracked correctly, your accountant can confidently claim Section 179 and De Minimis deductions without missing anything.
At Red Leaf Bookkeeping, we make sure your books are organized so you never overlook legitimate write-offs or scramble for receipts in April.
👉 Book a free Money Clarity Call and see how clean books can turn into real tax savings.