Section 179 Deduction Calculator
Enter your equipment purchase to see the deductible amount, phase-out math, and tax savings.
Runs entirely in your browser — your numbers never leave this page.
How it works
Section 179 lets you expense equipment in year one instead of depreciating it over 5–7 years:
- 2026 headline numbers: deduct up to $2,560,000 of qualifying equipment placed in service in 2026.
- The phase-out: once your total 2026 qualifying purchases pass $4,090,000, the limit shrinks dollar-for-dollar — and vanishes entirely at $6,650,000.
- Three gates: business use must exceed 50% · the asset must be placed in service this tax year (ordered isn’t enough) · the deduction can’t exceed your business taxable income.
- Income cap isn’t a loss: the disallowed slice carries forward to future years with no expiry.
- Bonus depreciation backstop: 100% bonus depreciation is back for 2026 — it applies after Section 179 and can even create a loss.
- Vehicles: heavy SUVs (6,000–14,000 lbs) face a $32,000 first-year Section 179 cap; regular passenger cars follow separate luxury limits.
Frequently asked questions
What is the Section 179 limit for 2026?
$2,560,000 maximum deduction, phasing out dollar-for-dollar once total qualifying purchases exceed $4,090,000.
Does used equipment qualify for Section 179?
Yes — new and used equipment both qualify, as long as it’s new to your business and placed in service in 2026.
What happens if my deduction exceeds my income?
The excess carries forward to future tax years indefinitely — you don’t lose it.
What is the Section 179 vehicle limit?
Heavy SUVs (6,000–14,000 lbs GVWR) are capped at $32,000 of first-year Section 179; the rest is depreciated. Standard passenger cars have separate IRS luxury limits.
Section 179 vs bonus depreciation?
Section 179 is elected per-asset and capped by income; 100% bonus depreciation (back for 2026) applies automatically after 179 and can create a net loss.
Does software qualify?
Yes — off-the-shelf business software placed in service during the year generally qualifies as Section 179 property.
What does “placed in service” mean?
Ready and available for its intended business use in 2026 — merely ordering or paying isn’t enough.
Can I claim Section 179 on a home office?
Office equipment and furniture for a qualifying home office can qualify; the home itself uses separate home-office rules.
How do I claim the deduction?
On Part I of IRS Form 4562, attached to your business tax return for the year the property was placed in service.
Does Section 179 reduce self-employment tax?
For sole proprietors it flows through Schedule C, lowering both income tax and the SE-tax base — a double win.