Updated: February 2026
Fast Facts: Section 179 Tax Deduction Guide
Want to save money on taxes while upgrading your business? Section 179 lets you deduct the cost of qualifying equipment and software in the year it’s placed in service — potentially the full amount, up to annual limits — instead of spreading deductions over many years.
What Is Section 179 in Plain English?
Section 179 is an IRS provision designed to encourage businesses to invest in themselves. Instead of waiting years to benefit from depreciation, you may be able to write off all or most of an asset’s cost in the first year — subject to annual limits and your business’s taxable income.
Learn more about The Section 179 Deduction →
Quick Example
Imagine you purchase a $50,000 piece of equipment:
- Without Section 179: Deduct roughly $10,000 per year over 5 years
- With Section 179: Potentially deduct the full $50,000 in the year the equipment is placed in service
- Result: A larger first-year deduction that can put extra cash back into your business sooner
Who Can Use Section 179?
Section 179 is perfect for businesses that:
- Purchase or finance new or used equipment
- Use the equipment for business purposes
- Need to lower their tax bill quickly to improve cash flow
- Are planning to upgrade or expand their operations
Even if you finance your purchase, you can still claim the Section 179 deduction. Explore financing options →
What Can You Deduct?
Qualifying purchases include, but are not limited to:
- Business Equipment & Machinery
- Vehicles for Business Use (with specific rules and limits) Learn About Vehicle Deductions →
- Computers and Off-the-Shelf Software
- Office Furniture
- Certain Building Improvements
See our complete list of qualifying equipment →
2026 Deduction Limits
- Maximum Deduction: Up to $2,560,000 — most small and mid-size businesses can deduct the full cost of their equipment
- Phase-Out Threshold: Only kicks in if you place more than $4,090,000 of equipment in service during the year — so the vast majority of businesses won’t be affected
- Note: Your Section 179 deduction can’t exceed your business’s taxable income for the year. If it does, you can carry the unused portion forward to future years. For detailed phase-out rules and limits, see our Section 179 Deduction page.
These limits are adjusted annually for inflation. For the complete rules, detailed examples, and bonus depreciation info, see our Section 179 Deduction page
Plan your purchases accordingly to maximize your first-year write-off!
Three Simple Steps to Claim Your Deduction
- Purchase & Place in Service: Buy or finance qualifying equipment and place it in service by the end of your tax year (December 31 for most businesses)
- Estimate Your Savings: Use our Section 179 Calculator to see how much you can save
- File Your Deduction: Complete IRS Form 4562 when filing your taxes (your tax professional can help)
Why Businesses Love Section 179
- Immediate Tax Relief: Lower your tax bill in the year of purchase
- Better Cash Flow: Keep more capital on hand for business growth
- Simple Process: One form, one deduction—no lengthy depreciation schedules
- Financing-Friendly: Finance your equipment and still take the deduction in year one
Financing Makes It Even Better
Financing your equipment qualifies it for Section 179. You finance the equipment, spread payments over time, and still take the full deduction in year one — so you get a big tax break now while paying for the equipment gradually.
Learn more about Section 179 Qualified Financing →
Stay Informed & Take Action
- Keep Up with Changes: Tax laws evolve—check for updates →
- Voice Your Support: Sign our petition → to help protect these valuable deductions
- Need More Guidance? See Common Questions →
Disclaimer: This guide is for educational purposes only and does not constitute tax or legal advice. Always consult a qualified tax professional for advice specific to your situation.
Sources: Rev. Proc. 2025-32 (2026 inflation adjustments); IRS Notice 2026-11 (bonus depreciation guidance); Instructions for Form 4562.