Planning to buy equipment for your business before year-end? A new tax proposal could change the math.
Here is the normal rule, in plain language: when your business buys equipment — a work van, computers, machinery, software — you usually cannot deduct the whole cost in the year you buy it. Tax rules make you spread the cost over several years. (Accountants call this “capital cost allowance,” or CCA.)
On September 15, 2026, the federal government proposed the Productivity Mega Deduction. If it becomes law, businesses could deduct the FULL cost of most new equipment in the year they start using it. The proposal would expand immediate write-offs from about 15% of business assets to about 65% — covering vehicles, computer equipment, software, machinery, and more. Buildings are excluded.
What should a small business owner do with this news? Three practical tips:
- Mind the date. Only equipment acquired on or after September 15, 2026 would qualify if the measure passes. If you bought equipment earlier this year, the old rules still apply to it.
- Keep two dates straight. It is not just when you pay — it is when the equipment is “available for use” in your business. Save your invoice and note the date the equipment actually went into service.
- Do not buy for the deduction alone. A write-off saves you tax at your tax rate — it does not make a bad purchase good. Buy what your business actually needs, and let the timing work in your favor.
One honest caveat: the measure is proposed, not law yet, and details could change. And if you are a sole proprietor, the deduction would be limited to the income from the business that uses the equipment.
This is exactly the kind of timing decision we walk small business owners through every fall. If you are planning a purchase before year-end, talk to us first — a 15-minute conversation can save you from missing a deduction you are entitled to.
TFB Tax & Bookkeeping — T1 from $89, bookkeeping from $89/month (first month free), T2 from $899. FEIFEI 437-879-6899, taxfinbiz.com
