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Business finance / Section 179 Calculator

Section 179 Calculator

US rates · checked 20 Oct 2026
$

Enter a number of at least 0

%

Enter a number from 0 to 100%

Must be more than 50% to qualify for Section 179.

%

Enter a number from 0 to 60%

Federal plus state rate on your last dollar of income.

$

Enter a number of at least 0

The deduction can't exceed this; any excess carries forward.

$

Enter a number of at least 0

All qualifying equipment placed in service this year, for the phase-out.

$

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2026 limit (IRS Rev. Proc. 2025-32). For 2025 it was $2,500,000. Check irs.gov for 2027.

$

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2026 figure (IRS Rev. Proc. 2025-32). For 2025 it was $4,000,000. Check irs.gov for 2027.

Section 179 deduction this year
$150,000.00
$36,000.00estimated tax savings
$114,000.00net cost after savings
Equipment cost$150,000.00
Business-use share · 100%$150,000.00
Deduction limit after phase-out$2,560,000.00
Business income cap$300,000.00
Section 179 deduction$150,000.00
Carried forward to next year$0.00
Left to depreciate other ways$0.00
Tax savings · 24% of the deduction$36,000.00

This is an estimate. Confirm the year's limits and your eligibility with irs.gov or your tax adviser.

See breakdown

How the Section 179 calculation works

Your Section 179 deduction and tax savings on business equipment, with the deduction limit and phase-out applied.

  1. Start from the business-use share of the cost

    A $150,000 machine used 100% for business has a $150,000 basis. Business use must be over 50% to qualify.

  2. Apply the yearly dollar limit

    For 2026 the limit is $2,560,000. It drops dollar for dollar once total qualifying purchases pass $4,090,000, the phase-out threshold. Enter the figures for your tax year.

  3. The deduction can't exceed business income

    If taxable business income is lower than the allowed amount, the rest carries forward to later years.

  4. Tax savings = deduction × your marginal rate

    A $150,000 deduction at a 24% marginal rate saves about $36,000 in tax this year.

Worked example. A $150,000 equipment purchase used 100% for business, with $300,000 of business income and a 24% tax rate, gives a $150,000 Section 179 deduction and about $36,000 in tax savings.

Section 179 FAQ

How does the Section 179 deduction work?

It lets you deduct the cost of qualifying equipment in the year you start using it, instead of depreciating it over several years, up to a yearly dollar limit.

What is the Section 179 limit?

It is set by law and adjusted for inflation each year. For 2026 it is $2,560,000, reduced once purchases pass $4,090,000 (2025: $2,500,000 and $4,000,000). This page defaults to the 2026 figures; check irs.gov or the Form 4562 instructions for your tax year and edit the inputs.

What property qualifies for Section 179?

Tangible personal property bought for your business, such as machinery, equipment, office furniture and computers, plus off-the-shelf software. You can also elect to include qualified improvement property and some improvements to nonresidential buildings: roofs, HVAC, fire protection and alarm systems, and security systems. The property must be acquired by purchase (not as a gift or inheritance) and used more than 50% for business. Land, buildings and investment property don't qualify (IRS Publication 946).

Can I use Section 179 for a vehicle?

Yes, if business use is over 50%. Cars, light trucks and SUVs rated at 6,000 lb gross vehicle weight or less are passenger automobiles with yearly depreciation caps; see the vehicle depreciation calculator. A heavy SUV over 6,000 and up to 14,000 lb has its own Section 179 limit: $31,300 for tax years beginning in 2025 and $32,000 for 2026 (Rev. Proc. 2025-32). That SUV limit doesn't apply to vehicles with a cargo area at least 6 feet long that isn't reachable from the passenger compartment, or seating for more than nine behind the driver (IRS Publication 946).

What happens if my deduction is more than my business income?

The Section 179 deduction is limited to taxable business income. The unused part carries forward to future years.

How does the Section 179 phase-out work in 2026?

The $2,560,000 limit drops by $1 for every $1 of Section 179 property placed in service above $4,090,000. With $4,140,000 of purchases the limit is $2,510,000, and at $6,650,000 or more it reaches zero. Enter your total purchases in the calculator to see your reduced limit.

What is the difference between Section 179 and bonus depreciation?

Section 179 is elected, has a yearly dollar limit and can't exceed business taxable income. Bonus depreciation (the special depreciation allowance) has no dollar or income limit: the One Big Beautiful Bill Act restored it to 100% for qualified property acquired and placed in service after January 19, 2025, unless you elect out, and it can cover new or certain used property. Many businesses use both; ask your tax adviser which order suits you.

What happens if I stop using the equipment for business?

If business use drops to 50% or less in any year of the property's recovery period, you may have to recapture part of the deduction as ordinary income on Form 4797 (IRS Publication 946).

Sources: IRS Publication 946: How to Depreciate Property · IRS Instructions for Form 4562 · IRS Rev. Proc. 2025-32 (2026 inflation adjustments)

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