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Section 179 Deduction Calculator

Section 179 lets businesses deduct qualifying equipment in year one rather than depreciating over years. 2026 cap: $1.22M, with phaseout starting at $3.05M total purchases.

Equipment cost (this purchase)

Total Section 179 purchases (year)

phaseout starts at $3.05M

Taxable business income (before deduction)

caps the deduction

Marginal tax rate

Allowed deduction

$145,000

first-year expense

Tax savings

$46,400

Phased-out limit

$1,220,000

2026 cap: $1.22M

Carryforward to next year

Section 179 mechanics

Section 179 lets businesses deduct the cost of qualifying equipment in year one rather than depreciating over years. 2026 limit: $1.22M. Phase-out: dollar-for-dollar reduction once total purchases exceed $3.05M; gone entirely at $4.27M.

Income limitation: deduction can't exceed taxable business income (excluding 179). Excess carries forward indefinitely. After Section 179, bonus depreciation can apply to the remaining basis.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Section 179 Deduction Calculator is built to give a quick, browser-based estimate for section 179 deduction. Section 179 lets businesses deduct qualifying equipment in year one rather than depreciating over years. 2026 cap: $1.22M, with phaseout starting at $3.05M total purchases. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the section 179 deduction result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this section 179 deduction estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter the cost of equipment you're buying.
Enter total Section 179 qualifying purchases for the year (drives phaseout).
Enter your taxable business income before the 179 deduction (caps the allowed amount).
Enter your marginal tax rate.
Read the allowed deduction and tax savings — anything above income limitation carries forward.

Frequently Asked Questions

What qualifies for Section 179?

Most tangible business personal property: machinery, equipment, vehicles (with limits for SUVs and luxury cars), computers, off-the-shelf software, and qualified improvement property. New or used both qualify.

How does Section 179 differ from bonus depreciation?

Section 179 has a hard dollar cap and phaseout; bonus depreciation has no cap. 179 has an income limitation; bonus doesn't. 179 is elective per-asset; bonus applies automatically. Many businesses use Section 179 first, then bonus on excess.

What about vehicles?

Heavy SUVs (over 6,000 lbs GVWR) limited to $30,500 (2026 estimate) of 179. Passenger vehicles have separate luxury auto caps. Certain trucks and large vans without 'luxury' classification can take full 179. Rules are complex — verify for your specific vehicle.

Can I claim Section 179 on rental property?

Generally no for the building itself. Personal property used in a trade or business that incidentally relates to a rental (active rental management) may qualify. Passive landlord rentals usually don't qualify.