Section 179 Deduction (2026)

Write off equipment now—within limits you supply

Section 179 lets businesses expense qualifying asset purchases immediately instead of depreciating over years—subject to annual dollar limits, investment phaseouts, business income caps, and asset-specific restrictions. Congress changes limits; this calculator does not hard-code 2026 statutory maximums—you enter the limit and eligible costs you believe apply.

Enter equipment purchases, user-specified Section 179 limit, remaining business taxable income, and compare immediate expense tax savings vs straight-line depreciation timing for 2026 planning.

Why you enter the limit

Federal Section 179 maximums and phaseout thresholds depend on tax year legislation and inflation adjustments in Rev. Proc. and extender bills. Rather than invent a number on your behalf, the tool uses your entered cap—align it with IRS publications for your tax year before purchasing assets.

How to use the calculator

Step 1 — Enter eligible asset costs

Machinery, computers, furniture placed in service this year.

Step 2 — Enter Section 179 limit and phaseout if applicable

Annual max and reduced limit if investment exceeds phaseout threshold you enter.

Step 3 — Apply business income limitation

179 deduction cannot exceed business taxable income you enter (simplified).

Worked example

You enter $1,000,000 federal limit (example only—verify yours). $80,000 equipment purchase, $50,000 business income before 179 → deduction may cap at $50,000 income limit; excess carries to bonus depreciation or MACRS if elected separately.

Bonus depreciation companion

After 179, remaining basis may take bonus depreciation at percentage you enter in bonus depreciation calculator—we do not preset statutory bonus rates.

State conformity

Many states limit or disallow Section 179 above state caps. Compare state tax comparison for conformity.

Schedule C and SE tax

179 reduces net Schedule C profit and SE tax when applicable—1099 tax calculator.

Common mistakes

• Expensing land or buildings improperly
• Exceeding business income limitation
• Assuming calculator default limit matches 2026 law without checking
• Ignoring state decoupling

Related tools

Bonus % user-entered: bonus depreciation calculator. QBI: Section 199A QBI calculator. Federal: federal income tax calculator.

Listed property and vehicles

Passenger automobiles have dollar caps on Section 179 and bonus depreciation regardless of limit you enter—heavy SUVs over 6,000 lbs GVWR follow different caps. Listed property requires business-use percentage logs; below 50% business use triggers recapture rules on disposition.

Partnership and S-corp basis limits

Section 179 passed through K-1 limited by partner basis and at-risk before business income limitation at individual level—entity may allocate 179 but partner cannot deduct beyond basis.

SUV over 6,000 pounds GVWR still subject to luxury auto caps unless truck chassis qualifies—do not enter full purchase price without cap adjustment for passenger vehicle class.

179 on listed property requires >50% business use or recapture on drop below 50% in later year—mileage log mandatory.

Reading your results for section 179

The interactive panel above shows a transparent calculation trace in cents—use it to sanity-check inputs before you rely on any number for decisions. Tax software at filing time may differ when every credit, limitation, and state conformity rule is applied in full. Treat output here as structured planning math aligned to 2026 federal reference data where noted, not as e-file output or professional advice.

When your situation includes items this specialized tool simplifies—multiple entities, prior-year carryforwards, treaty elections, or state nonconformity—layer those facts manually or with a preparer. The goal is to narrow uncertainty enough to ask better questions, not to eliminate the need for review when dollars are material.

Recordkeeping that survives scrutiny

Keep source documents (forms, statements, logs, confirmations) that support every input you typed. IRS and state audits often start from third-party reporting; your job is to reconcile 1099s, K-1s, and broker exports to the story you file. Digital backups with dates beat reconstructed spreadsheets created after an notice arrives.

For section 179, retain worksheets year to year when carryforwards exist—loss carryovers, credit carryforwards, passive loss suspensions, and basis schedules die silently if you change preparers and lose history.

Related tools on this site

Bonus % user-entered: bonus depreciation calculator. Business net: 1099 tax calculator.

2026 federal brackets and payroll context

Ordinary income tax brackets and standard deductions for 2026 follow IRS Rev. Proc. 2025-32 ($16,100 single / $32,200 joint standard deduction; seven marginal rates from 10% to 37%). Social Security tax applies at 6.2% on wages up to the $184,500 wage base; Medicare continues at 1.45% with Additional Medicare Tax above threshold wages. These layers stack independently from specialized rules modeled in this section 179 tool—run the federal income tax calculator when you need the full return picture.

Quarterly estimated tax may be required when withholding does not cover liability—see the quarterly estimated tax calculator. Year-end refund or balance due comparisons belong in the tax refund estimator once withholding and payments are known.

Before filing season

Reconcile this section 179 calculator estimate against draft Form 1040 lines and attached schedules your software produces. Look for mismatches in basis, carryforwards, and state add-backs—the first pass with a specialized calculator often misses secondary limits that full return software catches. Update inputs when you receive final 1099s, K-1s, and corrected broker statements; January revisions are normal.

If results imply large balance due, adjust withholding or estimated payments before December 31 when possible—penalties accrue on underpayment even when you file timely in April. If results imply large refund, you may be over-withholding or overpaying estimates; tune W-4 or voucher amounts for better cash flow without chasing refunds as a savings strategy.

State returns often piggyback federal logic but diverge on conformity items. Re-run state tools when federal inputs change materially so you do not pay state estimates based on federal-only planning from this section 179 calculator page.

Sources and methodology

IRC Section 179; limits user-entered per instructions. Rev. Proc. 2025-32 for income tax rates on savings. Educational.