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Section 179 Deduction Calculator (2026)
Estimate how much a business-equipment purchase actually costs after the Section 179 deduction and 100% bonus depreciation. Enter the price and your tax rate to see your first-year write-off, your estimated tax savings, and your net cost.
Estimate your 2026 Section 179 tax savings
| Section 179 deduction | — |
| Bonus depreciation (100% in 2026) | — |
| Total first-year deduction | — |
Estimate only — not tax advice. 2026 limits: Section 179 caps at $2,560,000 and phases out above $4,090,000 in total purchases; bonus depreciation covers the rest at 100%. Your actual deduction can't exceed your business's taxable income for the year, and state rules vary. Confirm everything with your CPA before you buy.
How the 2026 Section 179 deduction works
Section 179 of the U.S. tax code lets a business deduct the full purchase price of qualifying equipment in the year it's placed in service, instead of depreciating it a little at a time over many years. Paired with financing, it's one of the most powerful combinations in small-business finance: you deduct the entire machine now, but pay for it over several years.
2026 limits at a glance
| Provision | 2026 figure | What it means |
|---|---|---|
| Section 179 maximum deduction | $2,560,000 | The most you can expense under §179 in one year |
| Phase-out threshold | $4,090,000 | Above this in total purchases, the §179 cap drops dollar-for-dollar |
| Phase-out complete | $6,650,000 | §179 fully phased out; bonus depreciation still applies |
| Bonus depreciation | 100% | Covers the remaining basis after §179 — no dollar limit |
Figures reflect IRS Rev. Proc. 2025-32 and the One Big Beautiful Bill Act of 2025, which made the higher Section 179 limits and 100% bonus depreciation permanent (indexed for inflation).
A worked example
Say you buy a $100,000 machine and your business is taxed at a24% marginal rate. You deduct the full $100,000 in year one (Section 179 covers it entirely, well under the cap). That deduction saves you roughly $24,000 in taxes — so your effective net cost is about $76,000. Finance the purchase, and you keep that $24,000 working in your business while paying the machine off over time. Run your own numbers in the calculator above.
Deduct the whole machine now — pay over time
Financed equipment placed in service this year generally qualifies for Section 179 just like a cash purchase. That's the best of both worlds: preserve your working capital, take the full deduction, and spread the cost. If you're buying before year-end, line up your financing early — the deduction only lands if the equipment is delivered and in service by December 31.
Get matched with equipment lenders →Frequently asked questions
How much can I deduct under Section 179 in 2026?
For 2026 the Section 179 deduction caps at $2,560,000, and the deduction begins to phase out dollar-for-dollar once your total qualifying purchases exceed $4,090,000 (fully phased out at $6,650,000). Almost every small-business equipment purchase falls well under the cap, so you can typically deduct 100% of the cost in year one.
What's the difference between Section 179 and bonus depreciation?
Section 179 lets you choose how much of an asset to expense, up to the annual limit, and can't exceed your business's taxable income. Bonus depreciation (100% in 2026 under the OBBBA) has no dollar cap and applies to the remaining cost basis after Section 179. IRS rules require you to apply Section 179 first, then bonus depreciation on whatever is left.
Do I have to pay cash to claim Section 179?
No. Equipment you finance and place in service during the tax year generally qualifies for Section 179 just like a cash purchase — so you can deduct the full amount now while spreading the payments over several years. For a profitable business, the first-year tax savings can exceed a full year of the loan's interest.
Does used equipment qualify for the Section 179 deduction?
Generally yes, as long as the equipment is new to your business and placed in service during the tax year. Both new and used qualifying business equipment are eligible. Your CPA confirms eligibility for your specific situation.
Why does Section 179 make December so important?
The deduction applies in the year equipment is placed in service — meaning delivered and ready to use, not just ordered. A profitable business that buys and takes delivery before December 31 claims the deduction on this year's return, which is why year-end is peak equipment-buying season.
This calculator is general education, not tax advice. Section 179 limits, phase-outs, and eligibility depend on your situation, and your deduction can't exceed your business's taxable income. For the full mechanics, read our Section 179 and equipment financing guide. Always confirm with your CPA before making a purchase decision based on taxes.