Author Archives: Custom Truck One Source

Recovering From the Labor Shortage in the Construction Industry

The construction industry in the United States is expected to grow considerably over the next several years. This growth may create millions of new jobs. However, the construction industry today faces the worst labor shortage in decades, leading to significant wage increases due to intense competition among employers offering higher pay and benefits. 

Other sectors, too, including warehousing and transportation, are competing for the same labor pool. As a result, experienced construction workers are increasingly tempted to migrate to these other sectors, hoping to benefit from higher wages and improved working conditions.


The Labor Shortage Shows No Signs of Letting Up 

The shortage may persist because job openings no longer exhibit their historical relationship with unemployment. Two years following the onset of the coronavirus, the unemployment rate in the United States stagnated despite a remarkably high number of job openings. Several root causes may explain this phenomenon.  


Some are structural, while others have a short-term cyclical nature.  

  • Many baby boomers retire earlier than anticipated. 
  • Unemployed workers hesitate to return to work due to mental health, physical health and childcare concerns. 
  • Nonwage benefits, such as work autonomy and supportive management, are becoming increasingly salient among construction workers. 
  • A post-pandemic failure to quickly restart training programs restricts the influx of new construction workers. 
  • A drop in net migration due to COVID-19 travel restrictions has made it difficult for the construction industry to attract foreign workers.


The Impact of the Labor Shortage on Projects 

The labor shortage’s ripple effects reverberate through the project supply chain and life cycle. Higher wages, benefits and premiums have doubled the overall labor costs of project execution. At the same time, job-site productivity and quality issues are increasing the number of reported project delays as owners struggle to find skilled and experienced workers.  

Falling productivity correlates with sharp rises in wages, which are hitting historic highs in some US cities. Consequently, project owners have resorted to extending project timelines by up to 25 percent. The long-term impacts of the labor shortage in the construction industry may be even worse as oil companies absorb new workers across the United States. 


Restoring Balance in the Sector 

The current labor shortage calls for thoughtful plans to prevent further project delays, dips in productivity, and wage spikes. Construction companies should find new ways to minimize job-specific labor content and prop up project development by innovatively redesigning projects. 

Companies in the sector can attract workers by accelerating the training of recruits, reviewing nonwage benefits, and proactively building pipelines for future employees. This could mean reducing the time it takes to onboard candidates who pass interviews and shrinking hiring timelines.  

C-level executives could personally steer systematic programs for attracting and retaining talent to renew growth and increase profitability across the entire value chain. These programs must address availability gaps and labor needs now and in the future. Meanwhile, project contractors and owners should consider replacing traditional contracts with more collaborative ones. 


Unraveling the Labor Mismatch 

The current environment has provided the US construction industry with an opportunity to fuel inclusive growth and bolster the economy as it rebuilds the country’s infrastructure. But it must first resolve the ongoing labor shortage by uncovering diverse ways of creating better jobs, improving productivity and revitalizing the entire value chain. 

Labor shortages are just one of the many uncertainties the construction industry is facing. Equipment shortages, new regulations, and rising surcharges create a challenging environment for fleet planning. Our team of equipment experts are well-versed in these challenges and are ready to help you navigate these uncertainties. Contact us today. 

Stringing Block Shipping

The uncertainty and backlogs caused by the supply chain are going to remain an unwelcome business companion for longer than anyone wants to believe.

There are innovative ways to save money we’ve learned from these challenges, though, and Custom Truck One Source is helping customers get creative in shipping and ordering stringing blocks to avoid workflow-killing delays.

One of our partners has even found out how to create more space in a truck.

New shipping allows Custom Truck One Source and our partners to double the amount of bundle blocks sent per truckload. There is now the capacity to send 72 bundle blocks at a time.

Thanks to this innovation, the days of needing two truck shipments for orders of 36 to 70 bundle blocks are over, saving the potential problems that can arise during a two-truck delivery, from delays to needing an extra staff person to wait for separate drop-offs. And now our customers have one less thing to worry about during a complicated transmission-stringing job.

Meanwhile, Custom Truck also offers 22-inch bundle blocks, a smaller solution to the more common 28-inch bundle-block sets more commonly offered in the utility industry.

Smaller blocks aren’t just cheaper per unit. They weigh less and don’t take up as much truck space as their 28-inch counterparts, which can make 22-inchers a more attractive option.

Additional bonuses with this equipment: Some linemen also claim to prefer 22-inch blocks because of their easier-to-manage size and weight, and 22-inch blocks can also pull 795 wire, giving them additional versatility.

Custom Truck’s creative solutions team ensures you have the bundle blocks you need when the job is started, even if you only get 24-hour notice.

Our expert team consisting of industry veterans Roland ThaggardMaryann Spera and Trinia Dunn can help you size, plan, reduce capital outlay and optimize your spend so you can get to work and achieve your profit goals.

Find your blocks here or contact Maryann at 260-273-1273.

What Are the Benefits of Using a Digger Derrick for Your Job?

The need to dig narrow and deep holes came about during the 1940s with the build-out of the American electrical grid.  

You can see the need for these specialized trucks. They are true multitaskers. Read on to learn about the many benefits and features of digger derricks in this article. 


Anatomy of Digger Derricks 

They use a hydraulic winch to lift objects from the ground much like a small crane does. The amount of lift a digger can handle is called sheave height, also known as working height. 

These hydraulic trucks use a boom with an attached auger. Atop the boom sits a bucket for a worker. 

Outriggers lower the center of gravity of the boom so that it doesn’t fall over. This becomes especially important on unlevel ground, and in windy conditions. 


Digger Derricks Benefits 

These trucks are mainstays of the oil and gas, construction, and telecom industries. They perform several different, but related tasks: 


Utility Pole Installs 

They dig deep, narrow holes for telephone and utility poles. Common digger derricks dig up to 10 feet deep and 18 inches in diameter. 

These trucks can be fitted with various sized augers depending on how deep and wide a hole each project requires. 


Boom Work 

The auger works from a hydraulic boom that also lifts workers to telephone or electrical wires for installations and repairs. 

The boom is also perfect for lifting workers to trim tree branches away from electrical and telephone wires. 



Once the hole has been dug, these trucks can lift and move heavy utility poles and other materials. Workers use the digger derrick to position the pole for proper installation into the hole that has been prepared for it. 


Other Uses 

Digger derricks often get used in digging out tree stumps. A digger derrick also makes a great choice for digging shallow wells. These derricks can take workers underground and aid in fixing potholes in roads. 


Different Types of Digger Derricks 

Digger derricks differ mainly in the capacity that they can handle. But, they also differ in the kind of ground they can handle. 



These have sheave heights up to 50 ft. Distribution-sized derricks are very common in the electrical line and telecom industry. 



These derricks are larger than distribution models. They have sheave heights of up to 60 feet. 


Pressure Diggers 

Choose these when digging through tough ground and rock. These use a wider auger of up to 6 feet in diameter. They dig deeper, up to 60 feet in some cases. 

These heavy-duty diggers get used for foundations and other projects requiring wider and deeper holes. 


Backyard Diggers 

Built for job sites in tight spaces, these will have less sheave height than other models, typically between 40 and 48 feet. 


Track Diggers 

Choose these when working in swampy areas or otherwise difficult terrain. If the work area is a place you cannot reach with tires, you need a tracked digger. 


One of the Most Useful Industrial Machines 

Digger derricks enjoy unmatched versatility. Instead of needing three or four different machines, you can do it all with one. 

When it comes time for you to buy a digger derrick, contact Custom Truck, the largest single source of commercial trucks and equipment. 

Track Equipment Trucks: Steel vs Rubber Tracks

We’ve had the wheel for almost 6,000 years. It has served its purpose so well that no one thought about modifying it. That is until the Industrial Age.

As machinery grew larger, the wheels they used became a liability. Wheels touch the ground over a small part of their surface area. This does not work well in certain situations. The wheel needed improvements. 

That’s where track equipment comes into play. Tracks allowed heavy machinery and equipment trucks to go places that would be impossible using wheels and tires. 

There are two main types of tracks. But which track works best, steel or rubber tracks? Read on to find out. 


Track Equipment vs. Tires  

Tracks are used on heavy machinery a great deal in the oil and gas industry, construction industry, and mining industry. There are some pros and cons to tracks depending on the weather and ground conditions 

Pro: Heavy machinery using tires cannot move well on soft terrain. There’s so much weight per square inch on the tires that the ground cannot support the weight and the equipment sinks. There’s not enough traction. Traction requires friction, and with a tire, there’s not enough friction. 

Steel tracks grab the ground and spread the weight over a large surface area. This allows even the heaviest machinery to traverse challenging terrain. 

Cons: Tires steer better. Tracks, in contrast, make your machine cumbersome to move around. 

The flip side to having a lot of friction with the ground is the energy requirement. It takes more horsepower and more fuel to move a 10-ton excavator using treads rather than tires. 


Rubber vs. Steel Tracks 

Once you know you will need track equipment, the question becomes, steel or rubber tracks? Here are some factors that will help you decide which to choose. 


Rubber tracks cost less than steel. They need replacing more often, but their long-term cost to operate is cheaper. Rubber tracks are easier to repair due to less weight and greater elasticity. 



Steel tracks bite into the surface better than rubber tracks. Heavy machinery is less likely to get stuck when using steel tracks. But, steel tracks chew up the ground including concrete.


Noise and Comfort 

Steel tracks clank, clang, and rattle. In sensitive environments, this might create too much noise pollution. Rubber tracks do not make these noises. 

Heavy machinery with rubber tracks rides more smoothly than one using steel. If you work  in construction, mining, or drilling, the rigors of riding on steel tracks can take a toll on a worker’s body. 


Types of Ground 

When working on grass and dirt, rubber tracks work best. They grip well, ride smoother, and do not tear up dirt and grass as steel tracks do. 

But, when working on ice and snow, or loose ground, steel tracks work best. They provide better traction on this type of ground and do not suffer wear and tear as fast as rubber does on loose terrain. 


Both Types of Tracks Work Great 

Without track equipment, many areas would be off-limits to excavators and dozers. Even smaller construction equipment such as skid steers cannot operate on soft, loose, or icy ground without tracks. Please contact us today to reserve your track equipment. 

Secure Stringing Block Orders Before the Rush

Supply chain problems are such a constant in the utility industry right now that professionals in the field are more focused on what they can’t get than what’s currently available.

In Florida and other southern states, where there is still significant recovery underway due to Hurricane Ian’s damage, you are also facing a shortage of transformers and pole hardware crucial to rebuilding.

This lack of supplies is in addition to the other challenges lineworker’s regularly face while waiting on a contract. Once selected, and likely expected to start a job immediately, you don’t want to be scrambling for the right tools, especially when winter weather delays are sure to cause additional obstacles.

Contractors can plan proactively to use this lag time to secure critical items such as stringing blocks for transmission and distribution rebuild. Custom Truck One Source’s Tallahassee location, at the gateway of the hurricane’s damage, has an inventory of distribution dollies and can supply single and bundle blocks into the Florida market as well.

We have solutions to your supply challenges in blocks, grips, tools and safety across the US in our multiple stocking warehouses.

Custom Truck’s creative solutions ensure you have the blocks you need when the job is started, even if you only get 24-hour notice.  Our expert team consisting of industry veterans Roland Thaggard, Maryann Spera and Trinia Dunn can help you size, plan, reduce capital outlay and optimize your spend so you can get to work and achieve your profit goals.

Find your blocks here or contact Maryann at 260-273-1273 or by email.

Why the Forestry Industry Is Concerned About the Spotted Lantern Fly

The Chinese lanternfly (Lycorma delicatula), also known as the Spotted lanternfly, is an insect species causing great concern in the forestry industry in North America because it destructively feeds on over 100 species of trees and other plants. Let’s take a closer look at this insect and why it matters to the forestry industry. 


The Origin and Spread of the Spotted Lanternfly in the United States 

The Spotted lanternfly originated in China and other parts of Asia. As an adult, it can jump, walk or fly short distances. However, this insect spreads mainly by laying eggs on various surfaces such as vehicles and equipment. 

The bugs don’t sting or bite, nor are they venomous, so they’re not harmful to humans or pets. However, they present a serious threat to the forestry industry. For that reason, industry stakeholders have been closely monitoring the Spotted lanternfly. 

The eggs get relocated, sometimes across long distances, leading to the spread of this insect across vast geographical areas. The bug lays its eggs in the fall on the smooth surfaces of a host plant or non-host material. In the spring or early summer, the eggs hatch into nymphs that feed by sucking the sap from the stems of leaves of host plants. 

The Spotted lanternfly can feed on a wide variety of host plants. However, the adults prefer feeding on the grapevine (Vitus vinifera) and the tree of heaven (Ailanthus altissima). The insect first appeared in Berks County, Pennsylvania, in 2014. Since then, this invasive species from Asia has spread across North America. 


Effectively Controlling the Spread of the Spotted lanternfly in the United States 

The Spotted Lanternfly eats a variety of fruits including grapes and other fruit trees. These flies are invasive and can be spread among significant distances if people move items containing egg masses. The biggest threat to the U.S. is that this fly can impact the grape, orchard and logging industries. 

In Pennsylvania, the Spotted lanternfly’s point of origin in the United States, scientists from the U.S. Department of Agriculture collaborated with their Chinese counterparts to import tiny wasps that are the insect’s natural enemies in China. Pest control experts have also proposed other ways to combat the spread of these bugs. 

For example, they suggested setting up sticky traps on trees. However, pest control experts caution that these traps may capture other small animals. They recommend placing a screen layer on the trap to prevent it from trapping birds. 

The Virginia Department of Agriculture and Consumer Services encourages the public to adopt habits that prevent the accidental transportation of the insects’ eggs. The department urges people to, for example, purchase local firewood and burn it all before the eggs hatch. 

Additionally, the agency urges the public to avoid parking their vehicles near bushes and under trees where the Chinese lanternfly is known to hide and lay eggs. Raising public awareness of the insect can also help curb its spread. For that reason, many states are teaching residents how to identify the Spotted lanternfly’s eggs so that they can destroy them on sight. 

Forestry experts believe the most effective way to destroy the eggs is the good old-fashioned way of crushing them or dousing them in hand sanitizer, 10% diluted Clorox or alcohol. Professional coordinated pest control methods may, however, be necessary for larger populations of these bugs.


Custom Truck One Source and Battle Motors Announce New Partnership

Kansas City, Missouri, October 25, 2022 – Custom Truck One Source (Custom Truck), is excited to announce the expansion of their offerings with the addition of Battle Motors to their truck inventory.

As part of the partnership, Custom Truck will offer Battle Motor’s full cabover line including electric trucks, as well as parts and service to the Kansas City, MO market and other cities. The partnership will enable Battle Motors to leverage Custom Truck’s distribution channels and expand their market presence while providing first-class customer service and support on a national level.

“We are excited to expand Custom Truck’s chassis offerings through the addition of Battle Motors”, said Fred Ross, CEO of Custom Truck. “This partnership will allow us to offer electric powered options to our customers as part of our “one source” offering.”

Custom Truck offers a comprehensive range of services to the heavy equipment market. The company sells, rents, customizes, remanufactures and services a diverse range of machinery and assets. The addition of Battle Motors products allows Custom Truck to offer CARB emission compliance solutions for sales and rental customers, better serving the refuse & municipal markets.

No newcomer to the industry, Battle Motors is building upon decades of design and engineering expertise to produce heavy duty trucks—including a fully electric chassis. Every truck is purpose-built to excel in a multitude of environments and applications, including refuse, recycling, construction, utility, and delivery. In the refuse and recycling space, electric trucks are available for front, rear and automated side-loader applications and in both standard and crew cab configurations.

“Battle Motors is pleased to aggressively enter the Utility Truck space with the industry leader Custom Truck One Source. We are focused on driving technology and innovation that gives our customers exceptional value, confidence, and performance. Partnering with a leading dealership like Custom Truck allows us to step-up that mission,” said Michael Patterson, CEO & Chairman of Battle Motors.



Custom Truck One Source (Custom Truck) is the first true single-source provider of specialized truck and heavy equipment solutions, offering a vast rental fleet, new and used equipment sales, aftermarket parts and tooling supply, world-class service, customization and remanufacturing, in-house financing solutions and reliable liquidity of aged assets through our auction. Our equipment breadth, seasoned experts, and integrated network of locations across North America together deliver superior service and unmatched efficiency to our customers. Dig in at and keep up with us on Facebook, Instagram and Twitter.



Battle Motors was founded in 2021 by Mike Patterson, the founder of Romeo Power. Battle Motors, a leader in the development of electric vehicle (EV) technology, acquired commercial vehicle Original Equipment Manufacturer (OEM), Crane Carrier Company, LLC (CCC) in 2021. Battle Motors is the leader in the vocational truck industry,

providing work-ready diesel, clean natural gas (CNG), and now EV chassis designed and manufactured in North America for the refuse and recycling markets. Battle Motor’s durable, dependable trucks are built to excel in a multitude of applications that now include middle-mile and last-mile delivery. CCC has been manufacturing commercial vehicles for 76 years and is based in New Philadelphia, Ohio. For more information please visit: and follow us @BattleMotors

Overview of Container Handler Trucks

If your business frequently moves full or empty containers, you understand the importance of using the right equipment to ensure you complete every job correctly. Container handler trucks offer maximum lift potential for any job to boost productivity and your bottom line. Get the job done right at your port or rail yard by exploring the many benefits of a container handler truck today! 


What Is a Container Handler? 

Container handlers are specialized forklifts that efficiently stack containers, even when heavily loaded. Since container handlers perform by using precise movements, they offer a variety of functionalities and features that complement many different jobs. Each container handler includes components built to maximize efficiency, ergonomics and safety, which are vital to their overall design and usability. 


How Do Container Handlers Operate? 

There are two varieties of container handlers available for workers to utilize. The first is empty container handlers, which offer improved maneuverability and stability. Since empty container handlers often feature hydrostatic load sense steering and power shift transmissions, they offer quick and efficient operation regardless of the stack height. 

Most empty container handlers utilize a torsion-resistant frame made with high-tensile steel to provide longer service life. Site managers can even opt for double stacking handlers to stack two containers simultaneously. 

The other variety is the full-capacity container handler, a high-performance machine that relies on power and visibility to stack empty containers with greater precision. A full-capacity container can lift cargo weighing up to 43 tons and clear 5 feet of vertical height. Container handlers are, also, ideal for situations that require single-row stacking, loading or unloading. 


What Are Container Handler Trucks Used For? 

Container handler trucks can benefit a wide variety of businesses due to their high degree of efficiency, safety and precision. Using a container handler results in minimal operating costs due to their efficient speeds and long service life. One of the main uses of container handler trucks is to remove and efficiently store empty containers to create more space in a warehouse or loading dock. Similarly, full-capacity containers make organizing and distributing heavy loads easy. 

Investing in a container handler truck offers excellent value and increases the efficiency and productivity of your business. These machines are designed for optimal operator comfort and feature ergonomically designed cabs, which translates to less driver fatigue and improved business results. 


Benefits of Container Handler Trucks 

Using a container handler truck for your business offers many benefits, such as: 


Double Container Handling 

If you choose an empty container handler, your workplace will have the option to move two containers simultaneously so your drivers can complete more work in a shorter amount of time. Since the same truck can perform single and double container handling, your drivers can complete jobs without altering plans based on available equipment. Even if your operations only require moving one container at once, you will benefit from the durability of equipment that can transport two units at the same time. 


Enhanced Visibility 

Many container handler trucks also feature various cabin options to provide better driver support. For example, a cabin may tilt back a certain degree to make it easier for operators to look up. Since these resources are designed with the driver in mind, many businesses find that using a container handler truck results in substantial improvements to operational efficiency. 


Operator Comfort 

Container handler trucks feature designs that help operators find an ideal position by adjusting the seat and steering column and changing the truck parameters. Many cabins also include a multifunction joystick for ergonomic steering. Since most handler trucks are built to run quietly, users remain comfortable while performing tasks with this equipment. 


Toughness and Power 

Container handlers can accommodate heavy weights to help offset loading and achieve speed and power in every lift. Due to the high strength of the system, the container handler truck can safely move loads of up to 11 tons. The durable design enhances structural stability and improves chain life for lower costs and reduced employee downtime. 


Accurate Handling 

Many container handlers feature full-electronic inching and smooth shifting to improve load handling. Greater handling accuracy helps drivers achieve high productivity levels even when stacking multiple containers. 


Using Container Handlers With Other Waste and Refuse Trucks 

Garbage collection has undergone many changes throughout time. From the early days of trash bags to today’s hands-free, less labor-intensive solutions, it’s clear that the garbage industry is continuously improving. 

However, even with the creation of specialized trucks to service the garbage industry, there is still a gap in trash collection roles and a pressing need for a separate unit to pick up and empty containers. Today, the use of container handlers in garbage collection is becoming more common to accommodate this need. 

Container trucks are ideal in missed truck situations, where if a trash truck fails to empty some containers, a container delivery unit can grab the receptacle and empty the contents. Container handlers can also benefit from waste and refuse operations because they can hold damaged waste containers for assessment, raising them and rotating them to expose any rust or holes on the bottom so workers can perform a repair. 

The container trucks in container delivery units are essential to improving the efficiency of the entire container transport process. When using container handlers, it becomes easy for operators to pick up and place front and rear garbage containers, allowing waste and refuse trucks to complete their tasks efficiently. 


Shop Our Selection of Container Handler Trucks Today 

Custom Truck One Source is one of the first nationwide, single-source providers of heavy equipment and truck solutions. We offer a vast selection of new and used equipment for purchase or rent, as well as aftermarket parts and tools. Our extensive inventory and team of seasoned experts make us a reliable choice for all your needs. We have multiple locations across North America ready to serve our clients and deliver unmatched efficiency. 


To learn more about our equipment selection or to request a quote, please complete our online contact form or call us at 844-855-9048 today! 

Tooled-Up Trucks Tackle Jobs Quicker

Stop taking it for granted that tooling up a truck is a time-consuming mess.

Ordering a vehicle that is already kitted up with gear beforehand brings simplicity to your workflow, freeing up you and your crew to get the lights back on.

Custom Truck One Source sells tool kits that are loaded on your rented or purchased vehicles. It saves you from waiting around for a missing tool or glove that needs to be there before work can start.


How are supply chain problems avoided?

We are able to utilize our millions of dollars in inventory to make sure your truck has the tools you need when it arrives at your work site or yard. Custom Truck is a distributor of lineman tools with thousands of SKUs regularly in stock, so you won’t have an idle truck because of supplier delays.


When should I order a kit?

Whenever you’re adding a vehicle to your fleet. When you are working with your Custom Truck One Source representative putting your equipment plan together is a great time to talk about tooling up your equipment.  You can easily add a kit option at the time of purchase or after as we are building your equipment.

Some of our customers with kitted-up truck orders that arrived in September were surely happy when their vehicles showed up ready to tackle Hurricane Ian’s destruction right away.

Custom Truck tools up your buckets and diggers where they are built, in Kansas City, MO.  Our location in the middle of the country gives us easy interstate access to deliver your truck and tools quickly.


What kinds of tools are on the kits?

Your tool list!  We have standard tool lists to start with for buckets, diggers, forestry and foreman trucks but we will use the list you specify. Our bucket truck kit comes with more than 70 SKUs, including all the major brands as well as Custom Truck blocks and dielectric tools. Forestry kits, meanwhile, include hydraulic saws and other specialty gear for vegetation work.


Are the kits customizable?

Yes. Custom Truck accommodates customers that might need additional tools for specialty jobs or prefer a specific brand of gear. We’re ready to help you tackle nearly every situation, and our staff of experts can offer job-specific tool suggestions.


What if I have a truck and just need a tool kit?

Custom Truck will drop ship your tool list in as little as a week in most cases. We have utility tooling centers across the country, and therefore local inventory to support your immediate needs.

Interested in more information about truck kits?

Call your Custom Truck One Source sales representative or email your tool list to [email protected] to get the process started.


Section 179 Deductions for 2022

In the Section 179 deduction, businesses can deduct the full purchase price of qualifying equipment and/or software purchased or leased during the tax year. This can provide a significant tax break for businesses of all sizes.

However, you may also find it helpful to know that businesses will still be able to depreciate 100% of the cost of any eligible equipment throughout the year. Keep reading as we explain exactly what Section 179 is, how it works and what you need to keep in mind for the upcoming tax season.

For those of you wondering about section updates, 2022 Section 179 deductions did have an update. The Section 179 deduction for 2022 is one-million-80-thousand dollars. You may, also, have an equipment purchase qualified to conform to COVID-19 restrictions.

What Is the Section 179 Deduction?

If you’re wondering what the Section 179 deduction is, it is a depreciation deduction. It is a part of the United States Internal Revenue Code. This code actually allows taxpayers to elect to make any deductions of the cost of certain types of property on their income taxes as an actual expense. It does this instead of requiring the cost of that property to be capitalized and later depreciated.

The Section 179 deduction was first introduced by Congress in 1984 as section 168(k) of the Internal Revenue Code (IRC). In simpler terms, it allowed businesses to deduct the entire purchase price of qualifying equipment purchased or leased during the tax year.

The original section applied only to certain depreciable assets that had a recovery period of 20 years or less. It rapidly became popular with small business owners because it provided an immediate reduction in taxable income.

Take a look at Section 179’s progression. In 2002, Section 179 was amended to include software purchased or leased during the tax year. The maximum deduction amount increased to $25,000. The phase-out threshold increased to $200,000.

In December 2015, Congress passed the Protecting Americans from Tax Hikes (PATH) Act, which made several amendments to Section 179. The maximum deduction amount increased to $500,000, and the phase-out threshold increased to $2 million.

Considering the potential need for tax preparation, let’s take a look at how Section 179 works.

How Does Section 179 Work?

Essentially how it works is that it allows businesses to be able to take an immediate deduction for any business expenses, such as equipment purchases that are related to any depreciable asset. Some of those assets could be equipment, software, or even vehicles. This code allows businesses to be able to lower their current year tax liabilities instead of capitalizing an asset and having it depreciate over the next tax years.

If you’re wondering if you can claim Section 179, you can as long as you purchased, leased, or financed your equipment and placed it into service or an operational state by midnight of December 31st of that current year. It’s important to note that Section 179 often changes from year to year.

Additionally, the Section 179 deduction expanded to include improvements to nonresidential property, including roofs, heating, and air-conditioning systems, fire protection and alarm systems, and security systems. These changes were effective for tax years beginning in 2021.

Here’s What You Need For Tax Season

Keep this in mind for the upcoming tax season. The current deduction limit for the year 2022 is $1,080,000. What this basically means is that your company has the ability to make a deduction from the full cost of any qualifying equipment. It doesn’t matter if that equipment was new or used at the time of purchase.

The cost just cannot exceed $1,080,000 from your taxable income of the current year. Keep in mind that the deduction is fine until you reach $2.7 million in overall purchases for that year.

Many factors can help taxpayers determine whether to take the deduction and how much of the cost to deduct. For example, this deduction phases out dollar for dollar if total equipment costs exceed $2 million, and is not available at all for passenger vehicles.

In addition, when a taxpayer purchases more than $2.7 million in business equipment, the deduction decreases dollar for dollar over that amount – to zero at $3 million in equipment costs.

It’s important to note that these limits are only per entity/fiscal year and do not stack from year to year. In other words, if a business is purchasing more than $2 million in equipment this year it will not be able to take the full deduction, but rather will need to divide the cost between this year and next year.

Here’s What To Look For: Section 179 For The Upcoming Tax Season

Section 179 gives businesses more flexibility when they make a deduction. A bonus depreciation is usually used for expensing beyond the limit that section 179 provides. Keep in mind that section 179 will not be going away in the year 2022. However, there are a few things you want to remember about bonus deductions.

It will remain at 100% but you will, however, see a depreciation over the next 3 to 4 years. In 2023, you can expect Section 179 tax deductions and bonus depreciation to decrease to 80%. In 2024, it will decrease to 60% and so on.

Get Started

Now you know that Section 179 is another deduction tool that is available for businesses to be able to save on equipment costs and property purchases. The ability to make this claim is, however, limited to your taxable income. So, you can’t use it to create any losses or extend an existing loss.

Contact us for more information about buying equipment for your business.