How to Depreciate Restaurant Kitchen Equipment for Taxes
Last updated: August 21, 2026
Restaurant kitchen equipment — fryers, ranges, walk-ins, dish machines, hoods — gets depreciated over a 5-year recovery period under standard IRS MACRS rules, but almost nobody actually waits five years. Between Section 179 and 100% bonus depreciation, most independent operators write off the entire purchase price of new or used kitchen equipment in the same year they buy it. Which method you use changes your tax bill for this year specifically, not just eventually.
Here's why this matters more than it sounds like it should: a restaurant is a capital-heavy business running on thin margins, and equipment is usually the second-biggest check you write after buildout. A Frymaster battery, a walk-in cooler, a Hobart mixer, a new hood and ansul system — these aren't expenses in the way food and labor are. The IRS treats them as assets that lose value over time, and the tax code gives you three different ways to claim that loss: spread it out evenly (MACRS), take the whole thing in year one up to a cap (Section 179), or take the whole thing in year one with no cap at all (bonus depreciation). Pick wrong and you either leave cash on the table this year or create a tax headache in a year you can't afford one.
The actionable version: if you bought or financed kitchen equipment and placed it in service anytime in 2026, you can generally elect to deduct 100% of the cost this tax year using Section 179 (up to $2,560,000) combined with 100% bonus depreciation for anything above that. If your restaurant isn't profitable enough this year to use a full write-off, standard 5-year MACRS depreciation spreads smaller deductions across five tax returns instead — sometimes the smarter move if you expect a bigger profit year down the line. Neither choice is automatic. You elect it on Form 4562 when you file, and the equipment has to be "placed in service," meaning installed and usable, not just ordered or sitting in a truck.
This post walks through what counts as depreciable kitchen equipment, the real differences between MACRS, Section 179, and bonus depreciation, the actual steps to claim a deduction correctly, and a real example showing what the choice looks like in dollars for a working kitchen.
How do you depreciate restaurant kitchen equipment for taxes?
Kitchen equipment depreciates over 5 years under IRS MACRS as default. Most operators instead elect Section 179 (up to $2,560,000 in 2026) or 100% bonus depreciation to deduct the full purchase price in the year the equipment is placed in service, filed on Form 4562. Consult a tax professional before electing.
What actually counts as depreciable kitchen equipment
Almost anything with a useful life beyond one year and a real dollar value qualifies: fryers, ranges, flat-tops, ovens (convection, combi, deck), walk-in coolers and freezers, reach-ins, ice machines, dish machines, prep tables, mixers, slicers, POS hardware, hoods and fire suppression systems, and — this trips people up — used equipment. The IRS doesn't require equipment to be new to qualify for Section 179 or bonus depreciation, only that it's new to your business. A used Pitco fryer bought off a closing restaurant qualifies the same as one bought new from a distributor, as long as you weren't related to the seller.
What doesn't qualify: land, the building itself if you own it (that depreciates over 39 years as real property, a completely different schedule), and anything you lease rather than own outright, since the lessor is the one claiming depreciation in most lease structures. If you're financing equipment through a loan, you still depreciate it — financing doesn't change ownership, it just changes how you pay for it.
MACRS vs. Section 179 vs. Bonus Depreciation
All three methods eventually get you to the same total deduction — the full cost of the equipment. The difference is entirely about timing, and timing is what actually affects your tax bill in a given year.
| Method | How It Works | Best For | Rating |
|---|---|---|---|
| Standard MACRS | Spreads the deduction evenly over 5 years using IRS depreciation tables | Operators expecting higher profit in future years | Slow but Steady |
| Section 179 | Elect to deduct full cost immediately, capped at $2,560,000 for 2026, limited to business taxable income | Profitable independents buying under $2.5M in equipment | Most Flexible |
| Bonus Depreciation | Deduct 100% of cost immediately, no dollar cap, can create a net operating loss | Larger buildouts, new locations, or equipment above the 179 cap | No Ceiling |
In practice, most independent operators use Section 179 first because it's simple and well understood by small-business accountants, then apply bonus depreciation on top of anything that exceeds the 179 cap or their taxable income limit. The IRS actually requires you to apply Section 179 before bonus depreciation if you're using both. If your restaurant had a rough year and Section 179 would be limited by low taxable income, bonus depreciation can still apply and create a net operating loss you carry forward — something 179 alone can't do.
How to actually claim it — step by step
Get this right first. A fryer battery installed and running by December 20 counts for the current tax year. One still waiting on a gas line hookup on January 3 doesn't, even if you paid the invoice in November.
Pull every equipment invoice — fryers, refrigeration, smallwares over the capitalization threshold, POS hardware — and separate owned equipment from leased.
This depends on your projected taxable income this year versus next. A restaurant expecting a much stronger year in 2027 might intentionally use standard MACRS now to save the bigger deduction for later — this is a real strategy, not an oversight.
This is where the Section 179 election and depreciation calculations actually happen. See IRS Form 4562 instructions for the current-year worksheets.
If you sell equipment before it's fully depreciated, you may owe depreciation recapture tax on the gain. Your bookkeeper needs the schedule year-round, not just at filing time.
Real Kitchen Example
A 2,800-square-foot fast-casual chicken concept in San Antonio replaced its entire fry line in March 2026 — two Frymaster gas fryer batteries, a new ventless hood, and an oil filtration setup — for a combined $46,000, financed over four years through the equipment vendor. The owner's accountant ran two scenarios. Under standard MACRS, the deduction would have spread roughly $9,200 a year across five tax returns. Instead, because the restaurant had a profitable 2025 and expected 2026 to be similar, they elected full Section 179 on the entire $46,000. At their blended 24% effective tax rate, that meant an $11,040 reduction in their 2026 tax bill in the same year the cash actually went out the door for the down payment and first loan installments — instead of waiting five years to feel the benefit while still making monthly loan payments the whole time. The equipment itself, including the filtration system, also directly cut their oil spend; pairing that capital decision with a documented fryer maintenance schedule and running the ongoing savings through a frying oil cost calculator gave them a full before-and-after picture — the tax deduction up front, and the operating savings after.
- Confirm the exact placed-in-service date for every piece of equipment before your accountant files
- Separate owned equipment from leased equipment — only owned assets get depreciated by you
- Used equipment qualifies for Section 179 and bonus depreciation the same as new, if it's new to your business
- Section 179 is capped at your business's taxable income for the year; bonus depreciation is not
- Keep depreciation schedules with your ongoing books — you'll need them if you ever sell the equipment
Can you depreciate used restaurant equipment?
Yes. The IRS allows Section 179 and bonus depreciation on used equipment as long as it's new to your business — meaning you didn't previously own it and didn't buy it from a related party. A used fryer or walk-in bought from a closing restaurant qualifies the same as new equipment from a distributor.
What happens if I sell equipment before it's fully depreciated?
You may owe depreciation recapture tax, which treats some or all of your gain on the sale as ordinary income rather than capital gains, up to the amount you previously deducted. This is why keeping an accurate depreciation schedule matters even after the deduction is claimed.
