Section 179 Deduction Calculator
Calculate your Section 179 first-year deduction with the full limit cascade: dollar limit, phase-out, business-income cap, and carryforward, then compare side by side with bonus depreciation.
Built on IRS Pub. 946, Form 4562, and 26 U.S.C. §179.
§179 allowed this year
2026$0
enter your asset cost to begin
Advanced adjustments §179 limits, bonus, SUV, MACRS overrides
Total across all §179 property this year (per-taxpayer, not per-business).
Aggregate income from all actively-conducted trades/businesses. Caps your §179.
Disallowed §179 from a prior year (Form 4562 Line 10).
When the asset was ready for use.
On the basis remaining after §179.
GDS = faster. ADS = straight line.
3, 5, 7, 10, 15, 20, 27.5, or 39.
Total basis (mid-quarter test).
Runs the 40% test.
Applies the §179(b)(5) SUV sub-cap ($32,000 for 2026). Light vehicles use §280F caps (not modeled).
Federal only; states may differ.
Depreciation schedule
| Year | Rate | Depreciation | Cumulative | Remaining |
|---|
How year one breaks down
Why the timing matters
This is an estimate, not tax advice. It computes the federal §179 deduction for planning. Your filed return can differ because of income limits, state rules, pass-through allocation, and recapture rules. Confirm anything material with a CPA or enrolled agent.
The basics
What Section 179 is
Section 179 is a federal tax rule that lets a business deduct the full purchase price of qualifying equipment in the year it's placed in service, instead of spreading the cost over several years through depreciation. The deduction is capped by an annual dollar limit, a phase-out threshold, and your business taxable income.
Section 179 (§179)
A federal tax rule that lets a business expense the full cost of qualifying equipment in the year it's placed in service, up to an annual dollar limit, instead of depreciating it over time.
First-year expensing
Deducting an asset's full cost in the year you buy and start using it, rather than spreading the write-off across the asset's recovery period.
Phase-out threshold
The total dollar amount of qualifying property you place in service during the year; once you exceed it, your Section 179 limit shrinks dollar-for-dollar, reaching zero at twice the threshold.
Business-income limitation
A cap that prevents the Section 179 deduction from exceeding your total taxable income from actively conducting any trade or business during the year.
Carryforward
A disallowed Section 179 amount that moves to the next tax year, where it's added to that year's deduction and faces the same dollar-limit, phase-out, and business-income tests.
Bonus depreciation
An automatic first-year deduction that lets you write off a set percentage of qualifying property's basis after Section 179 is applied, with no dollar limit or income cap.
Qualified real property
A category of Section 179-eligible real estate that includes qualified improvement property plus roofs, HVAC, fire protection, and security systems on nonresidential buildings.
SUV sublimit
A lower cap within the overall Section 179 limit that restricts how much you can expense on a heavy SUV or vehicle rated above 6,000 pounds and up to 14,000 pounds gross vehicle weight.
Form 4562
The IRS form used to report depreciation, amortization, and the Section 179 election, filed with your annual tax return. Part I handles the Section 179 limit cascade.
Placed in service
When the asset is ready and available for use, not when you paid for it. Section 179 and depreciation both start here.
The math
The formula, and the order it runs in
Section 179 is applied before bonus depreciation and regular MACRS. The order is fixed by the IRS, and each step reduces the basis for the next.
First-year total = §179 allowed + Bonus + Year-1 MACRS (in that order)
Business-use basis
Cost times the business-use percentage. Property under 50% business use doesn't qualify for Section 179 at all.
SUV sublimit
If the asset is a heavy SUV, the elected amount is capped at the year's SUV limit ($32,000 for 2026) before anything else.
Dollar limit + phase-out
The annual limit ($2,560,000 for 2026) is reduced dollar-for-dollar by qualifying property placed in service over the phase-out threshold ($4,090,000).
Business-income limit
The tentative Section 179 (plus any carryforward) is capped at your aggregate taxable income from actively conducted trades or businesses.
Bonus depreciation
Applied to the basis remaining after Section 179. 100% for 2026 (permanent, post-OBBBA).
Regular MACRS
The standard depreciation schedule runs on whatever basis is left after Section 179 and bonus.
The numbers
The 2026 figures that drive your deduction
Three year-specific numbers determine how much you can write off in year one: the Section 179 dollar limit, the phase-out threshold, and the bonus depreciation rate. The calculator applies all three automatically when you pick a tax year.
Section 179 lets you expense up to $2,560,000 of equipment immediately, but the benefit shrinks dollar-for-dollar once you place more than $4,090,000 of property in service during the year. Bonus depreciation is 100% for 2026, so you can write off the entire remaining basis in year one if you choose.
$2,560,000
2026 Section 179 limit
Phase-out starts at $4,090,000 of total property placed in service. Bonus depreciation: 100% (permanent, Notice 2026-11). SUV cap: $32,000. All figures confirmed against IRS Pub. 946 and Rev. Proc. 2025-32 (2025-45 I.R.B. 695).
Worked examples
How it plays out
The same asset, deducted very differently depending on the elections you make and the limits that bind. Change the inputs above to match your own.
$50,000 of equipment, 100% business, elect $20,000 of Section 179, no bonus. Sufficient business income.
- §179 allowed$20,000
- Remaining basis$30,000
- MACRS Y1 × 14.29%$4,287
$50,000 of equipment, elect $20,000 Section 179, then 100% bonus on the remaining $30,000.
- §179 allowed$20,000
- Bonus 100% of $30,000$30,000
- Remaining basis$0
$4,100,000 total qualifying property in 2026. The limit drops from $2,560,000 to $2,550,000 ($10,000 over the $4,090,000 threshold).
- Dollar limit$2,560,000
- Phase-out reduction−$10,000
- Reduced limit$2,550,000
$100,000 elected, but business taxable income is only $40,000. The excess carries forward.
- Tentative §179$100,000
- Income limit$40,000
- Carryforward$60,000
The form
How the result flows to your tax return
Your Section 179 deduction shows up on your return through Form 4562. Part I handles the Section 179 election, the dollar limit, and the business-income cap. If you take bonus depreciation, it goes on Part II. Regular MACRS goes on Part III. The total from Part IV flows to Schedule C, Line 13. Here's how three scenarios map to the actual lines.
Straightforward case
$50k equipment · $20k §179$50,000 equipment, 100% business, elect $20,000 Section 179, no bonus, sufficient income. Year 1 total: $24,287.
Section 179 goes on Part I, regular MACRS on the $30,000 remaining basis goes on Part III.
| Form 4562 line | What goes there | Amount |
|---|---|---|
| Part I, Line 6 | Elected §179 cost | $20,000 |
| Part I, Line 9 | Tentative deduction (limit not exceeded) | $20,000 |
| Part I, Line 12 | §179 deduction allowed | $20,000 |
| Part II, Line 14 | Bonus depreciation (elected out) | $0 |
| Part III, Line 19c | 7-yr MACRS on $30,000 remaining (× 14.29%) | $4,287 |
| Part IV, Line 22 | Total depreciation | $24,287 |
→ Schedule C, Line 13: $24,287
With high equipment spending
Phase-out triggered$4,100,000 total qualifying property in 2026. The limit drops from $2,560,000 to $2,550,000 ($10,000 over the $4,090,000 threshold). Elect $2,540,000.
The phase-out reduces the dollar limit by $1 for every $1 of qualifying property over $4,090,000. At $4,100,000, the limit drops to $2,550,000.
| Form 4562 line | What goes there | Amount |
|---|---|---|
| Part I, Line 1 | Maximum limit after phase-out ($2,560,000 − $10,000) | $2,550,000 |
| Part I, Line 5 | Total cost of §179 property placed in service | $4,100,000 |
| Part I, Line 6 | Elected §179 cost | $2,540,000 |
| Part I, Line 9 | Tentative deduction (smaller of limit or elected) | $2,540,000 |
| Part I, Line 12 | §179 deduction (assuming income ≥ $2,540,000) | $2,540,000 |
→ Schedule C, Line 13: $2,540,000
Section 179 with bonus
§179 + 100% bonus$50,000 equipment, elect $20,000 Section 179, 100% bonus on the remaining $30,000. Year 1 total: $50,000.
With 100% bonus (the 2026 default), the entire remaining basis after Section 179 is deducted in year one.
| Form 4562 line | What goes there | Amount |
|---|---|---|
| Part I, Line 6 | Elected §179 cost | $20,000 |
| Part I, Line 12 | §179 deduction allowed | $20,000 |
| Part II, Line 14 | 100% bonus on $30,000 remaining basis | $30,000 |
| Part III, Line 19c | 7-yr MACRS on $0 remaining basis | $0 |
| Part IV, Line 22 | Total depreciation | $50,000 |
→ Schedule C, Line 13: $50,000
Sole proprietors only. This mapping follows Form 4562 Part I (the Section 179 limit cascade) through to Schedule C, Line 13. Partnerships and S-corps pass the Section 179 election through separately on K-1s, and the line assignments differ. If you file as anything other than a sole proprietor or single-member LLC, confirm the form flow with a CPA or enrolled agent.
Watch out
Common mistakes to avoid
- Forgetting the business-income limit, which caps your Section 179 at aggregate taxable income from active trades or businesses. The excess carries forward, it's not lost, but you can't deduct it this year.
- Not coordinating with bonus depreciation, which applies to the basis remaining after Section 179. With 100% bonus in 2026, the entire remaining basis can be deducted in year one.
- Counting the limit per business instead of per taxpayer. The dollar limit and phase-out apply once across all your businesses combined.
- Confusing the SUV cap with auto caps, which are separate. Heavy SUVs (over 6,000 lbs GVWR) have a $32,000 Section 179 sublimit; light vehicles have annual caps under Section 280F that this calculator doesn't apply.
- Assuming your state follows federal Section 179 and bonus. Many states cap Section 179 well below the federal limit or decouple entirely.
- Ignoring the 50% business-use rule, which disqualifies an asset from Section 179 entirely if business use is 50% or less in the year placed in service.
When to bring in a pro. Talk to a CPA or enrolled agent when you're electing Section 179 near the dollar limit or phase-out threshold, buying heavy SUVs subject to the $32,000 sublimit, or expecting your business taxable income to cap the deduction. The carryforward rules also benefit from professional planning if you can't absorb the full election this year.
Behind the answer
How I tested the Section 179 calculator
Before this calculator went live, I validated every calculation path against 10 test cases derived from IRS Pub. 946, Form 4562 instructions, and the Section 179 statute. Here's what that covers.
Limit cascade
The Section 179 dollar limit, phase-out reduction, business-income cap, and carryforward are each tested independently and in combination. I verified the phase-out math against the Jane Ash worked example in Pub. 946 ($4,050,000 → $2,450,000 limit) and the full phase-out point ($6,650,000 for 2026).
Order of operations
Section 179 reduces the basis first, then bonus, then regular MACRS on what's left. I tested this with the Pub. 946 worked example ($39,000 asset, $24,000 Section 179, $15,000 remaining → 14.29% MACRS = $2,144), stacked Section 179 + 100% bonus, and the SUV sublimit applied before the aggregate dollar limit.
Year-specific figures
The 2026 Section 179 limit ($2,560,000), phase-out threshold ($4,090,000), SUV cap ($32,000), and 100% bonus rate are each checked against the values I confirmed in IRS Pub. 946 and Rev. Proc. 2025-32 (2025-45 I.R.B. 695). The 2025 OBBBA mid-year boundary (40% bonus before Jan 20, 100% after) is tested at the exact date boundary.
Bad inputs
Zero cost, negative Section 179 elected, Section 179 exceeding the asset's basis, business use below 50%, and over-100% bonus rates are all caught and surfaced as field-level errors before the calculation runs, so you never get a misleading number from a typo.
Every test case traces back to the IRS limit, form line, or Rev. Proc. figure it came from. You can download all 10 test cases as JSON and check any deduction against the cited source. If you spot a result that doesn't match, tell me and I'll fix it.
FAQ
Questions people ask
What is the Section 179 limit for 2026?
The Section 179 limit is $2,560,000 for tax years beginning in 2026, with a phase-out threshold of $4,090,000. The deduction shrinks dollar-for-dollar once your total qualifying property placed in service exceeds that threshold, and it is fully eliminated at $6,650,000. The SUV sublimit for heavy vehicles is $32,000.
What is the Section 179 business-income limit?
Your Section 179 deduction cannot exceed your aggregate taxable income from the active conduct of any trade or business for the year, figured without the Section 179 deduction itself, the deductible half of self-employment tax, or any net operating loss deduction. Wages, Section 1231 gains, and interest from working capital all count toward it.
Can I carry forward unused Section 179?
Yes. Any amount disallowed solely by the business-income limit carries forward to later years and is added to that year's otherwise-allowable Section 179 deduction, subject to the same dollar-limit, phase-out, and business-income limits each year. It carries forward until used, unless the property is disposed of or another rule cuts it off.
What's the difference between Section 179 and bonus depreciation?
Section 179 is an elective, per-asset deduction capped at $2,560,000 (2026) and limited by your business income, so it cannot create a loss. Bonus depreciation is automatic (you elect out rather than in), has no dollar cap, and can create or increase a net operating loss. You apply Section 179 first, then bonus depreciation to the remaining basis.
What property qualifies for Section 179?
Tangible personal property used more than 50% for business and acquired by purchase: machinery, equipment, computers, off-the-shelf software, office furniture, plus qualified real property (qualified improvement property and certain roof, HVAC, fire-protection, and security systems on nonresidential buildings). Property received as a gift or inheritance, or bought from a related party, does not qualify.
What is the SUV cap for Section 179 in 2026?
The SUV cap is $32,000 for 2026, applying to sport utility vehicles rated over 6,000 and up to 14,000 pounds gross vehicle weight. Vehicles rated 6,000 pounds or under are subject to separate Section 280F passenger-auto caps that this calculator does not model.
Does my state conform to federal Section 179?
Often not fully. Many states cap Section 179 well below the federal $2,560,000 limit or decouple entirely from bonus depreciation, so your state deduction can be much smaller than the federal one. This calculator is federal only; confirm your state's rules with a CPA or enrolled agent.
Do I have to elect Section 179, or is it automatic?
You must affirmatively elect Section 179 on Form 4562, Part I, specifying which assets and how much of each asset's cost to expense. It never applies automatically the way bonus depreciation does. You can revoke the election by filing an amended return within the time prescribed by law, but once revoked, the revocation is irrevocable.
What this calculator doesn't model (and why)
Business income limitation detail
The calculator applies the business-income cap using the income you enter, but it doesn't model the full Form 4562 worksheet computation (which includes W-2 wages, Section 1231 gains, and excludes the Section 179 deduction itself, the deductible half of SE tax, and NOL deductions). Enter your aggregate active business income for an accurate result.
Listed property and recapture
If business use of a Section 179 asset drops to 50% or less in a later year, part of the deduction must be recaptured as ordinary income. This calculator assumes business use stays above 50% for the property's full recovery period and doesn't compute recapture.
Passenger vehicle caps
Vehicles rated at 6,000 lbs GVWR or less are subject to separate annual deduction caps under Section 280F that this calculator doesn't apply. Only the Section 179 heavy-SUV sublimit (over 6,000 lbs, up to 14,000 lbs GVWR) is modeled here.
Partnership and S-corp pass-through
Section 179 passes through to partners and shareholders separately on K-1s, with the dollar limit and business-income limit applying at both the entity and owner levels. This calculator targets sole proprietors and single-member LLCs filing Schedule C.
State conformity
Many states cap Section 179 well below the federal limit or decouple entirely from bonus depreciation. There's a note field in Advanced to track your state's rules, but the calculator computes federal depreciation only.
Short tax years and same-year disposal
The calculator assumes a full 12-month tax year and that the asset remains in service all year. Short tax years, same-year disposal, and mid-year basis adjustments are not modeled.
Married filing separately
If you're married filing separately, the Section 179 dollar limit is split 50/50 between spouses unless you jointly elect a different split. This calculator shows the full single-taxpayer limit; halve it manually if the MFS split applies to you.
Updates
What's changed
- Initial build, with the 2026 Section 179 limit ($2,560,000), phase-out threshold ($4,090,000), and SUV cap ($32,000) checked against the latest IRS figures.
Sources
Where the numbers come from
- IRS Publication 946: How to Depreciate Property
- IRS Form 4562 Instructions (2025): Part I Section 179, Line 14 bonus ordering
- IRS Form 4562: Depreciation and Amortization
- IRS Topic 704: Depreciation
- 26 U.S.C. §179: Election to expense certain depreciable business assets
- Rev. Proc. 2025-32 (2026 inflation adjustments, 2025-45 I.R.B. 695)
- Schedule C (Form 1040) Instructions: Line 13, Depreciation and Section 179