Section 179 for Tow Trucks: What Operators Should Know Before December 31
Every fall, accountants start telling their towing clients the same thing: if you need a truck, buy it before the year ends. For 2026, the tax incentive behind that advice is bigger than it’s ever been. Here’s what tow and recovery businesses should know before planning a year-end purchase.
What Section 179 does
Normally, a business deducts the cost of a truck a little at a time over several years. Section 179 lets you elect to deduct the full cost of qualifying equipment in a single year instead. For a business that needs a new wrecker or carrier anyway, that can make a large difference to this year’s tax bill.
The 2026 numbers are the highest yet. Under the 2025 federal tax law, the IRS set the 2026 limit at $2,560,000 of equipment, and the deduction starts to phase out once a business places more than $4,090,000 of equipment in service during the year (IRS Rev. Proc. 2025-32). Few towing companies will get near those caps, so for most, the limit isn’t the issue.
As a simple illustration, a business in the 24% federal bracket that deducts a $150,000 truck would cut its federal tax by about $36,000. Your real number depends on your income, your entity type and your state, which is why your accountant should run it.
Why timing matters in Q4
Every truck takes time to go from order to road-ready, and lead times vary by model and build. With the 2026 tax year ending December 31, Q4 is when a lot of operators start shopping.
If a 2026 deduction is part of your plan, the earlier you start, the more options you have. You can see what’s available now on our current inventory page.
Not every purchase has to happen this year. Your accountant can help you decide whether this year or next makes more sense, and the right truck matters more than the timing.
Five things to know before you buy
- Used trucks can qualify. Section 179 applies to equipment that’s new to your business, so a used wrecker can count. The exception is buying from a related party, like a family member or a company you control.
- Financing still works. You own a financed truck even while you’re making payments, so it can still qualify (IRS Publication 946). Leases are different and often don’t qualify, so check the structure before you sign. Our financing page and payment calculator are good places to start.
- Trade-ins reduce the eligible amount. If you trade in a truck, generally only the cost above the trade-in’s value counts toward Section 179. Bring your accountant the full deal numbers.
- The truck has to be used mostly for business. Section 179 requires more than 50% business use. For a working tow truck that’s rarely a problem, but it matters for any pickup or service vehicle you add to the deal.
- Section 179 can’t create a loss. The deduction is limited to your business income for the year. If your income won’t cover it, bonus depreciation may be the better tool. Under the 2025 law, 100% bonus depreciation is now permanent for qualifying equipment acquired after January 19, 2025, and it has no income limit (IRS). Your accountant can tell you which one fits.
A note for Connecticut and other state taxes
Federal and state rules don’t always match. Connecticut, for example, doesn’t fully follow the federal bonus depreciation rules (Shipman & Goodwin), so your state deduction may look different from your federal one. Ask your accountant how your state treats the purchase.
A simple year-end plan
- Talk to your accountant now. Ask whether a 2026 purchase makes sense for your income and how much equipment to plan for.
- Ask about availability early. Lead times vary by model and build, so start the conversation now.
- Line up financing early. Approvals and paperwork take time, especially in December.
- Keep your paperwork. Your accountant will want the purchase and delivery documents.
Talk to New England TruckMaster
We can show you what’s available, help you compare financing options, and give you the numbers your accountant needs. Call our sales team at 203-772-1217 or request a quote.
Looking at a specific Miller model? Our guide to Miller Industries wrecker models breaks down the lineup. And if a new truck is on the way, make sure its warning lights are set up right with our guide to tow truck light laws in CT, MA and NY.
This article is general information, not tax advice. Tax rules depend on your situation, so confirm the details with your accountant or financial advisor before you buy.