By Callum 
What’s the secret to the most profitable farms and agribusinesses?
They work harder during harvest season? Maybe.
But the real secret is something few farmers think about when they go to purchase grain cart harvest equipment: depreciation.
And if you’re not using depreciation to your advantage…
You’re leaving thousands of dollars on the table every year. Doesn’t matter if you’re buying tractors or combines. Grain carts or augers.
The equipment you purchase for harvest matters. But how you account for it on your taxes matters just as much.
The good news is: figuring out depreciation is pretty simple.
Below you’ll discover:
- Why Depreciation is Important for Grain Cart Harvest Equipment
- How to Strategically Use Section 179
- Benefits of Used Equipment
- Bonus Depreciation: What You Need to Know NOW
- How to Build a Depreciation Strategy That Outperforms the Competition
Why Depreciation Is Important for Grain Cart Harvest Equipment
When a business purchases equipment it doesn’t just write off the cost immediately. Instead, it depreciates the equipment over time.
That may not sound exciting, but depreciation = tax savings. The more you can depreciate each year, the less taxable income you earn and the more money you keep.
It really is that simple.
Except…
The farmers and ranchers that come out ahead at tax time aren’t just buying equipment hoping for the best. Depreciation is front and center in their minds when timing every purchase.
Looking for a grain cart? Are you buying new or used? Timing is everything when it comes to depreciation and maximizing your tax savings.
Even better news? Smart buyers are seeking out used grain carts right now as a way to enjoy premium equipment at bargain prices. And because it’s used, you can still take advantage of awesome tax benefits through depreciation.
Think about depreciation like this:
Brand new John Deere grain cart = $50,000 easy. But a used grain cart can cost half that. You can fully depreciate both machines, keeping your tax burden low and freeing up cash for your operation.
Buy new? You just lost $25,000+ in cash. Buy used and keep that money in your pocket.
Depreciation doesn’t care if your equipment is new or used. Make sure you do your homework before buying. Your bank account will thank you.
How Farmers Are Smartly Using Section 179
Section 179 is the first thing every farmer should look at when purchasing equipment. It allows businesses to deduct the FULL purchase price of qualifying equipment purchased during the tax year.
The Section 179 deduction amount was recently increased to $2.5 million. Basically, most farms can deduct the FULL PRICE of their grain cart harvest equipment purchase.
Here’s the cool part…
By deducting the FULL cost up front, farmers can drastically reduce their taxable income for that year.
Even better? BOTH new AND used equipment qualify for Section 179. So whether you’re buying that new John Deere grain cart or something gently used from your neighbor, you can deduct the entire purchase price.
It’s no secret that farmers who understand and take advantage of Section 179 keep tens of thousands of dollars more in their pocket every year than their competition who don’t.
Why You Should Consider Used Equipment
This is a little known secret that top performing farms already know.
Used equipment is the wave of the future.
Between rising interest rates and overall farm incomes declining, more and more farmers are turning to used equipment as a way to keep up with growing equipment needs without breaking the bank.
The American Farm Bureau reported that farm income declined 22.6% from 2022 to 2024. That’s a LOT of pressure on your bottom line.
Used equipment can help your farm weather the storm by:
- Lowering your initial investment, keeping working capital high
- Qualifying for Section 179 like new equipment
- Holding value better since it depreciates at a slower rate
- Proving dependable since it’s already “broken in”
Compare that to brand new equipment that could cost twice as much (or more) for the same depreciation write off and it’s easy to see how used equipment can SAVE your farm money.
Farmers that buy used aren’t wasting money on depreciation.
Bonus Depreciation: What’s Changing RIGHT NOW
If you pay attention to anything in this blog, pay attention to this.
Bonus depreciation is going away.
In 2025, bonus depreciation is at 40% and is on track to disappear completely in 2027. When it does disappear, it’ll go from 40% to 0%.
Still with you? Here’s why that matters.
Bonus depreciation allows you to take an additional deduction on top of your regular depreciation amounts. Equipment bought this year can still receive a bonus depreciation deduction. But what happens in 2027 when it’s gone?
Equipment purchased next year won’t be able to take advantage of bonus depreciation.
Depreciation strategies don’t happen by accident. If you wait until next year to start “figuring it out”, you’re automatically leaving money on the table.
Don’t get left behind. Bonus depreciation = tax savings. Take advantage of it now.
Building a Winning Depreciation Strategy
The best farmers and ranchers in the country don’t look at equipment purchases as isolated events.
When it comes time to buy new equipment or upgrade old equipment, they already have a plan to maximize their deductions while minimizing their tax liability.
Here’s what that plan looks like:
- Timing is everything – buy equipment when it maximizes your deductions
- Buy used equipment first to lower your capital cost while maintaining FULL depreciation qualifications
- Stack Section 179 and bonus depreciation together for the biggest first year write-off possible
- Consult with your tax advisor to make sure you’re not missing anything
Farmers who have a plan keep more money in their pocket. Farmers who do not… well you can guess which group comes out ahead at tax time.
Wrap Up and Key Takeaways
Depreciation is a weapon that farmers have at their disposal but few know how to use.
By timing purchases and understanding how to strategically use things like Section 179, any operation can dramatically reduce its tax bill and keep more money in the bank.
Let’s recap real quick:
- Section 179 allows you to deduct the FULL cost of equipment purchased in a given tax year (up to $2.5 million)
- Bonus depreciation is disappearing. If you wait, you’ll lose out.
- Used equipment qualifies for the same tax benefits at half the price
- Buy used before you buy new to keep more cash in your operation
- Don’t wait. Your competitors are already crushing it at tax time. It’s time to fight back.
Depreciation is how the best farms and ranches out earn their competition. Use it to your advantage and start keeping more of what you earn today.