You just dropped $150,000 on new kitchen equipment across three locations.
Nice.
Here’s the problem—most multi-unit operators don’t realize they could write off that entire equipment purchase this year, not over seven years.
The Section 179 tax deduction is one of the most powerful tax strategies for restaurants, especially for operators expanding or upgrading multiple locations.
Key Takeaways
- The Section 179 tax deduction allows multi-unit restaurant operators to immediately deduct up to $2.5 million in qualifying equipment purchases in 2025, rather than depreciating costs over multiple years.
- Qualifying purchases include kitchen equipment, POS systems, furniture, HVAC systems, security systems, and delivery vehicles.
- Equipment must be purchased and placed in service by December 31 to qualify, making early planning essential for multi-location projects.
- Operators should align Section 179 deductions with projected taxable income, considering whether current or future years offer greater tax benefits based on expansion plans and profitability.
- Working with restaurant-specialized accountants ensures multi-unit operators maximize Section 179 benefits through proper coordination, documentation, and strategic planning across all locations.
What Is The Section 179 Tax Deduction?
The Section 179 tax deduction allows restaurants to immediately deduct the full purchase price of qualifying equipment in the year it’s placed in service, rather than depreciating the cost over multiple years.
For multi-unit restaurant operators making substantial equipment investments, this can translate to immediate, significant tax savings that improve cash flow when you need it most (can you say, “government shutdown”).
Thanks to the One Big Beautiful Bill Act signed in July 2025, the deduction limits have doubled.
For 2025, restaurants can deduct up to $2.5 million in qualifying equipment purchases. The deduction begins to phase out dollar-for-dollar once total purchases exceed $4 million, and fully phases out at $6.5 million in total equipment spending.
How Does The Section 179 Tax Deduction Work?
Here’s how this process works.
Instead of depreciating a $100,000 kitchen equipment purchase over seven years (like you would with traditional depreciation strategies), Section 179 lets you deduct the entire $100,000 from your taxable income this year.
In a 24% tax bracket, that’s $24,000 in immediate tax savings—money that stays in your business to fund growth, cover operational costs, or invest in your next location.
To claim the Section 179 deduction, you must complete Part I of IRS Form 4562 (Depreciation and Amortization) and attach it to your tax return. The deduction isn’t automatic—you need to actively elect it and provide the proper documentation. This means working with your accountant before December 31 to ensure all qualifying equipment is purchased and placed in service by the deadline.
Why is The Section 179 Tax Deduction So Valuable for Restaurant Owners?
One word: flexibility.
You can use it whether you purchase, finance, or lease equipment.
You’re coordinating major upgrades across multiple locations simultaneously? Perfect. That’s exactly the scenario where Section 179 delivers maximum impact. The deduction applies to both new and used equipment, as long as it’s new to your business and used more than 50% of the time for business purposes.
How Does Section 179 Differ From Standard Depreciation and Bonus Depreciation?
Traditional depreciation spreads deductions across an asset’s useful life—typically five to seven years for restaurant equipment. Section 179 accelerates that entire benefit into year one.
But things get more complicated when you consider bonus depreciation. Here’s the gist:
Section 179 lets you pick and choose which specific assets to expense immediately—maybe you want to deduct your new POS system but depreciate furniture normally.
Bonus depreciation (now at 100% for assets placed in service after January 19, 2025) is all-or-nothing—it automatically applies to all assets in the same class.
Section 179 also can’t exceed your taxable income, while bonus depreciation can create a tax loss. Most multi-unit operators use Section 179 first on priority purchases up to the $2.5 million limit, then bonus depreciation handles the rest.
For restaurant operators, understanding these limits matters. If you’re planning a $3 million equipment refresh across your restaurant group, you can immediately deduct the full amount under Section 179. But if your total purchases hit $5 million, your available deduction drops to $1.5 million due to the phase-out. Strategic timing and planning become essential, especially when you’re managing capital expenditures across multiple locations with different needs and timelines.
What Purchases Are Considered Qualified Under Section 179 for Restaurants?
The Section 179 tax deduction covers a wide range of equipment and improvements that multi-unit restaurant operators purchase regularly.
Kitchen Equipment
Commercial ovens, ranges, refrigeration units, freezers, fryers, dishwashers, food prep equipment, and exhaust hoods all qualify for immediate expensing under Section 179.
If you’re replacing aging equipment across multiple locations or outfitting a new concept entirely, these purchases add up quickly—and the tax savings add up even faster.
POS Systems
Your point-of-sale systems qualify, too. This includes the hardware, terminals, tablets, and off-the-shelf software that run your operations.
Multi-unit operators often coordinate POS upgrades across all locations simultaneously, making Section 179 particularly valuable. The same applies to back-office computers, printers, and networking equipment used to manage your restaurant group.
Furniture & Fixtures
Tables, chairs, booths, bars, shelving, lighting fixtures, and dining room décor all qualify when used more than 50% for business purposes. If you’re refreshing the look across your concepts or opening a new location, these costs can be immediately deducted rather than depreciated over several years.
HVAC systems, security systems, and fire protection equipment installed in your restaurants also qualify under Section 179. These building improvements—classified as qualified improvement property—give restaurant operators flexibility to expense major system upgrades immediately. The same applies to interior improvements like new flooring, drywall, or remodeling projects that don’t involve structural changes or building expansions.
Vehicles
Delivery vehicles present an interesting opportunity for multi-unit operators. Cargo vans and trucks over 6,000 pounds gross vehicle weight rating (GVWR) used primarily for business qualify for Section 179. However, SUVs in this weight range face a $31,300 cap, with the remaining cost depreciated normally. If you’re running catering operations or operating delivery fleets across multiple locations, understanding these vehicle rules matters.
How to Time Section 179 Deductions Across Multiple Locations
Strategic timing separates operators who maximize Section 179 benefits from those who leave money on the table. When you’re managing capital expenditures across multiple restaurant locations, coordination and planning become essential tax strategy tools.
The “Placed in Service” Requirement
Equipment must be purchased and placed in service by December 31 to qualify for that tax year’s Section 179 deduction.
“Placed in service” means more than just purchased—the equipment must be installed, operational, and ready for business use.
A walk-in cooler delivered on December 28 but not installed until January 5 doesn’t qualify for the current year’s deduction.
So, if you’re coordinating equipment installations across five locations, you need to ensure contractors complete work before year-end. That means planning purchases in October or November, not December 23. However, this timing requirement also lets you strategically choose which year to take deductions based on your projected income.
End-of-Year Purchasing Strategies
Equipment must be purchased and operational by December 31 to qualify for that year’s deduction. While you have all year to make purchases, many multi-unit operators wait until Q4—and that’s risky.
Here’s why waiting creates problems. You’re planning a $500,000 kitchen refresh across four locations. If you start in November, you’re dealing with vendor backorders, fully booked installers, and potential weather delays. Equipment sitting in your storage room doesn’t count—it must be installed and operational. Start in September or October instead, and you’ve built in time for the inevitable delays.
The timing also depends on your income. Higher profits this year than next? Buy now and maximize the deduction when your tax bracket is higher. Opening two new locations next year with expected higher income? Consider delaying some purchases to take the deduction when it’s worth more.
Coordinating Equipment Upgrades Across Multiple Locations
Multi-unit operators face unique coordination challenges. You’re not buying one oven—you’re standardizing equipment across five kitchens. You’re not upgrading one POS system—you’re rolling out new technology to your entire restaurant group. This scale creates both opportunities and complications for Section 179 planning.
The opportunity: Economies of scale on equipment purchases combined with substantial tax deductions. Many vendors offer volume discounts when you’re outfitting multiple locations, and Section 179 lets you immediately deduct those combined purchases. A $200,000 multi-location equipment investment becomes $152,000 after tax savings in a 24% bracket.
The complication: Ensuring all equipment across all locations is actually placed in service by December 31. If Location A’s equipment is installed and operational but Locations B and C are still waiting on contractors, you can only deduct Location A’s purchases this year. Detailed project management becomes essential—tracking delivery schedules, installation dates, and operational status across multiple sites.
Cash Flow Considerations
Section 179 accelerates tax deductions, but it doesn’t change when you actually pay for equipment. If you’re financing $1 million in equipment across your restaurant group, you’re making monthly payments whether you take Section 179 or depreciate traditionally. The difference is the timing of tax benefits—and that timing matters significantly for cash flow.
Taking the full Section 179 deduction this year reduces your current tax bill, freeing up cash when you need it. For growing multi-unit operators, this improved cash flow can fund additional expansion, cover operational costs, or build reserves. The immediate tax savings essentially give you access to capital you would have otherwise sent to the IRS.
However, there’s a flip side: maxing out Section 179 this year means less depreciation expense in future years. If you expect significantly higher profits next year—perhaps from those two new locations opening in Q2—you might preserve some depreciation for when you’re in a higher tax bracket. This requires forecasting future taxable income and strategically allocating deductions across tax years.
Planning for Future Years
The $4 million phase-out threshold requires strategic planning for larger restaurant groups. If your total qualifying purchases exceed this amount, your available Section 179 deduction starts decreasing dollar-for-dollar. At $6.5 million in purchases, the deduction completely phases out.
For multi-unit operators planning major renovations or new openings, this creates a timing consideration. Instead of refreshing all eight locations in one year and triggering the phase-out, you might stage projects across two tax years to preserve full Section 179 benefits. Alternatively, you lean into bonus depreciation (now at 100% for assets acquired after January 19, 2025) to handle purchases that exceed Section 179 limits.
The key is coordination with your tax advisors before making purchasing decisions. Multi-unit restaurant operations involve complex capital expenditure planning, and maximizing Section 179 requires understanding how your total annual purchases interact with deduction limits, your projected taxable income, and your long-term growth strategy.
Make The Most Of Every Deduction
Section 179 offers multi-unit operators substantial tax savings, but only with proper planning and restaurant-specific expertise.
Managing tax strategy across multiple locations requires specialized knowledge.
Our accounting alliance connects you with CPAs who know exactly how to maximize deductions like Section 179.
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