On $50,000 of financed restaurant equipment placed in service in 2026, Section 179 lets you deduct the full $50,000 in year 1 — saving $12,000 in federal taxes at the 24% bracket. That's a real reduction in net cost, not a paper benefit. The 2026 cap is $1,160,000 with phase-out starting at $2.89M of equipment placed in service.
Pretty much all of it. Walk-ins, freezers, hoods, ovens, ranges, fryers, charbroilers, dishwashers, ice machines, espresso machines, mixers, slicers, prep tables, POS systems, refrigeration. Used equipment qualifies (as long as new to your business). Smallwares under the de minimis safe harbor ($2,500/item) can be expensed separately.
Real estate (the building itself). Leasehold improvements that became part of the structure (bathroom plumbing, structural walls). Inventory (food, paper goods, consumables). Land. Anything you lease (the lessor takes the deduction, not you).
Yes, you can finance equipment AND take the full Section 179 deduction in year 1. The deduction is based on the equipment's COST, not how much you paid down. Finance $50K, deduct $50K — even if you only put $5K cash down. This is the single most under-used tax move in restaurant operations.
Section 179 deduction is capped at your business's net taxable income for the year. If your restaurant nets $40K profit and you buy $80K of equipment, you can only deduct $40K via Section 179 in year 1. The remaining $40K rolls forward to next year (with the unused balance also eligible for bonus depreciation).
Yes, as long as it's new to your business. Used equipment qualifies for both Section 179 and bonus depreciation under the 2017 TCJA rules.
Doesn't matter — Section 179 doesn't pro-rate. Equipment placed in service on December 31 gets the full year-1 deduction. This is why many restaurants accelerate equipment buys into Q4 for the tax year.
Yes. Loan interest is a separate business expense, deductible in addition to the Section 179 equipment deduction. EFA payments split between principal and interest the same way.
Not all states conform to federal Section 179 limits. California, for example, has lower limits and different phase-outs. Run state tax separately or have your CPA model it.
Sort of. If you sell within 5 years for more than the depreciated basis, the gain is recaptured as ordinary income (up to the deduction taken). For a restaurant operator who keeps equipment 7–10 years, recapture is rare.
Compare offers from multiple equipment lenders in one application.
See If You QualifyDisclosure: Some links on this page are affiliate links. We may earn a commission when you complete a financing application via our partner. This does not change your rate or terms. We are not a lender, broker, or financial advisor.