Section 179 Tax Savings Calculator

Section 179 expense $1,160,000 cap (2024), $2,890,000 phaseout — best for small/mid-business equipment.

Qualified purchases

Annual 179 limit

Phaseout threshold

Total purchases across biz

Business income limit

Marginal tax rate %

Section 179 deduction

$200,000

Tax savings

$64,000

Phaseout reduction

How the math works

Limit = annual − phaseout reduction. Deduction = min(purchases, adjusted limit, biz income).

$200k purchases, no phaseout, under $1.16M cap, under $500k income = $200k × 32% = $64,000 savings.

How to Use

Enter qualified purchases.
Enter annual 179 limit.
Enter phaseout threshold.
Enter total purchases across biz.
Enter business income limit.
Enter marginal tax rate %.
Read section 179 deduction.

Frequently Asked Questions

Section 179 vs bonus depreciation?

Section 179: dollar-for-dollar phaseout when total purchases exceed threshold ($2.89M in 2024), capped at business income. Bonus: no income limit, no phaseout, applies to wider asset classes. Strategy: use 179 first (since uncapped at smaller scale), then bonus for excess. Eligible for 179: tangible personal property used in business, off-the-shelf software, qualified real property improvements (HVAC, fire alarm, security, roof). Not eligible: buildings, land, intangibles.

How is this tax impact computed?

Tax outcomes depend on filing status, income bracket, depreciation schedule, basis adjustments, AMT exposure, and state conformity. Real estate tax planning typically involves cost segregation, 1031 exchanges, opportunity zone, depreciation recapture, passive activity rules, and entity structure (LLC vs partnership vs S-corp). This calculator provides directional analysis — final position requires CPA review.

State conformity?

States vary on conformity to federal tax code: California, NY, MA decouple selectively. Bonus depreciation: most states reduce or eliminate. QBI: most states don't conform. Section 1031: federal-only deferral, some states require state-level recapture. Property tax cap: state-specific (CA Prop 13, MI Headlee, FL SOH). Multi-state property requires apportionment analysis.

When to prioritize this strategy?

Tax strategies have setup cost, complexity, and audit risk. Cost segregation: $5–15k study, materially helps high-basis investors. 1031: 45/180 day deadlines, identification rules, qualified intermediary fees. Opportunity Zone: long hold required. Stack strategies: don't double-count benefits. CPA + tax attorney coordination essential for $1M+ strategies.