Section 179 limit, phase-out, income cap and bonus depreciation for 2026 or 2025
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 30 Oct 2026.For tax years beginning in 2026 the Section 179 limit is $2,560,000, reduced dollar for dollar once equipment placed in service passes $4,090,000. For 2025 it is $2,500,000 and $4,000,000. The deduction cannot exceed business income. Bonus depreciation is 100% for property acquired after 19 January 2025.
Rates and rules read from the sources listed on this page (the earliest on 30 Oct 2026); they may have changed since.
Pick the year under "Tax year beginning in" and when the property was bought under "Acquired".
Type the "Cost of qualifying property (business share)" and your "Business taxable income before Section 179 (wages count)".
Type the "Amount to expense under Section 179", or press "Use the best election".
Read "Deducted this year", "Section 179 limit after phase-out" and "Section 179 carried forward", then press "Share result".
Section 179 lets a business deduct the cost of equipment, machinery, computers and similar property in the year it is placed in service, instead of spreading it over several years. This calculator applies the limits for tax year 2026 or 2025, then bonus depreciation on anything left, and shows the first-year deduction.
The dollar limit. The One Big Beautiful Bill Act doubled the limit for tax years beginning after 2024: $2,500,000 for 2025, with the phase-out starting at $4,000,000. For 2026 the inflation-adjusted figures are $2,560,000 and $4,090,000. Every dollar of qualifying property placed in service above the threshold takes a dollar off the limit.
The income limit. Section 179 cannot be more than your taxable income from the active conduct of your trades or businesses, which includes wages. The part you elect but cannot use this year carries forward. Enter your business income before the deduction to see the split.
Bonus depreciation. After Section 179, bonus depreciation applies to the rest of the cost, and it has no income limit, so it can create a loss. Qualified property acquired and placed in service after 19 January 2025 gets 100%, permanently. Property acquired before 20 January 2025 keeps the old schedule: 40% placed in service in 2025, 20% in 2026. Whatever remains is depreciated under regular MACRS, which this tool does not figure.
Choosing the mix. With 100% bonus depreciation, electing Section 179 above your business income only creates a carryover, because bonus would have deducted the same dollars this year. The calculator shows the election that gives the largest deduction now.
What it does not do. It does not apply the $32,000 SUV cap for 2026 ($31,300 for 2025), vehicle limits, the business-use test for listed property, real property rules or state tax. Married couples filing separately share one limit. An estimate, not tax advice.
Rev. Proc. 2025-32 sets the 2026 limit at $2,560,000 for tax years beginning in 2026. The limit shrinks by one dollar for each dollar of Section 179 property placed in service above $4,090,000, and reaches zero at $6,650,000. For 2025 the figures are $2,500,000 and $4,000,000, raised by the One Big Beautiful Bill Act.
Yes, for qualified property acquired and placed in service after 19 January 2025, which the One Big Beautiful Bill Act made permanent. Property acquired before 20 January 2025, including property under a binding contract signed before then, keeps the old phase-down and gets 20% if placed in service in 2026.
Section 179 is an election capped at a dollar limit and at your business income, with any excess carried forward. Bonus depreciation has no dollar cap and no income limit, so it can create a net operating loss, but it applies to whole classes of property unless you elect out. Section 179 is applied first.
Only the amount up to your taxable business income is deducted this year; the rest carries forward to later years. Business income here includes wages from a job. With 100% bonus depreciation available, it is usually better to elect Section 179 only up to your income and let bonus depreciation cover the rest.
Tangible personal property used more than half for business, such as machinery, equipment, computers, furniture and off-the-shelf software, plus certain improvements to nonresidential buildings like roofs and HVAC. Land, buildings and property used mainly outside the United States do not qualify. Only the business-use share of the cost counts.
No. Heavy SUVs have their own Section 179 cap, $32,000 for 2026 and $31,300 for 2025, and passenger cars have annual depreciation limits. Enter only the part of the cost that Section 179 can cover, and check the vehicle rules in the Form 4562 instructions before relying on the result.
Rates and rules change; check the source before you rely on a figure.
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