Section 179 Deduction Calculator

The 2026 Section 179 deduction limit is $1,250,000, with a phase-out beginning at $3,130,000 of total qualifying property placed in service. The limit is reduced dollar-for-dollar above the phase-out threshold and eliminated entirely at $4,380,000. SUVs over 6,000 lbs GVWR have a separate $30,500 sub-cap.

Section 179 is an immediate expense election; bonus depreciation is automatic for qualifying property. The bonus rate is phasing down: 60% in 2024, 40% in 2026, 20% in 2027, 0% in 2028 (absent legislative extension). Section 179 cannot create or increase a loss; bonus can. Most businesses elect Section 179 first up to the limit, then take bonus on remainder.

Tangible personal property used in business: machinery, equipment, computers, off-the-shelf software, office furniture, business vehicles (with limits), and qualifying real property improvements (HVAC systems, roofing, fire protection, security systems for non-residential buildings - since TCJA 2017). Land, inventory, and buildings themselves do not qualify.

No - Section 179 cannot create or increase a net operating loss. It's limited to your aggregate active business taxable income. Disallowed amounts carry forward indefinitely until you have enough income to absorb the deduction. Bonus depreciation has no such limit and CAN create a loss - useful in startup years.