Section 179 lets businesses expense qualifying property up to $2.5M in 2026 (raised from $1.16M), with phase-out beginning at $4M of purchases. Heavy SUV (6,000+ lb GVWR) capped at ~$31K.
Detailed instructions, formula notes, and US-context guidance shown in the calculator above.
Disclaimer: Estimate only. Consult a qualified professional for decisions with major financial, legal, or health consequences.
Loading calculator…
Calculator information
📋 How to use this calculator
- Enter asset cost and business-use percentage (must be >50% business use to qualify).
- Specify vehicle class — heavy SUV (>6,000 lb GVWR) has $31,300 cap; passenger auto has lower cap.
- Enter total qualifying purchases for the year (triggers phase-out above $4M).
- Enter marginal tax bracket.
- Review Section 179 deduction allowed plus remaining basis eligible for bonus depreciation.
🧮 Section 179 Expensing (2026 limits)
Deduction = min(Cost x Biz_% x Allowable_pct, $2.5M_cap - PhaseOut)
- 2026 limit: $2,500,000 (raised from $1.16M in TCJA)
- Phase-out threshold: $4,000,000 — dollar-for-dollar reduction above
- Phased out entirely above $6.5M total purchases
- Heavy SUV cap (6,000+ lb GVWR): $31,300 in 2026
- Cannot create NOL (capped at business taxable income, excess carries forward)
Section 179 elected per asset on Form 4562. Recapture if business use drops below 50% — must add back to income. Real property generally excluded, except Qualified Improvement Property (QIP) and some HVAC, fire/security systems, and roofs on non-residential.
💡 Worked example: $120K skid-steer loader, 100% business use
Given:- Asset: Caterpillar skid-steer loader
- Cost: $120,000
- Business use: 100%
- Total qualifying §179 purchases this year: $450,000 (well below $4M phase-out)
- Marginal tax rate: 24%
Steps:- Section 179 election: $120,000 (full)
- Phase-out check: $450K < $4M threshold → no reduction
- Tax savings Y1: $120,000 x 24% = $28,800
- Bonus depreciation on remainder: $0 (179 took it all)
- Stack with Section 179 + 100% bonus if multiple assets: extremely tax-efficient
Result: $28,800 federal tax saved Y1 (24% bracket) on a $120K asset, recovering 24% of the purchase price immediately. Cash flow boost equivalent to a 24% discount on the equipment.
❓ Frequently asked questions
What's the difference between Section 179 and bonus depreciation?
Section 179 is ELECTED (per-asset, taxpayer chooses); bonus depreciation is AUTOMATIC unless you opt out. 179 has dollar cap ($2.5M) and phase-out at $4M total purchases; bonus has neither. 179 can't create NOL; bonus can. 179 must be >50% business use; bonus less strict. Section 179 typically used first (taxpayer control), bonus picks up remainder automatically.
Does a heavy SUV qualify for the full deduction?
Yes — vehicles with GVWR (gross vehicle weight rating) over 6,000 lbs ARE NOT subject to the Section 280F passenger auto cap. The Section 179 deduction is capped at $31,300 (2026) for heavy SUVs specifically, but the REMAINING cost (above $31.3K) can be fully expensed under 100% bonus depreciation. Net effect: any Ford F-150 / Tesla Cybertruck / Cadillac Escalade can be 100% expensed Y1 (business-use portion).
What about pickup trucks vs SUVs?
Pickup trucks with cargo box 6+ feet AND GVWR over 6,000 lbs are exempt from BOTH Section 179 SUV cap AND Section 280F passenger auto cap — they get full §179 + bonus treatment without limitation. This is why F-250/F-350 super-duty trucks with long beds are popular business vehicles: no caps. Crew-cab F-150 with shorter bed may be classified as SUV depending on bed length.
Can I deduct equipment financed with a loan?
YES — the full purchase price qualifies for Section 179 even if financed. You can deduct $120,000 on a skid-steer with only $20,000 down payment. This is one of §179's most powerful features: the deduction is based on PURCHASE PRICE, not cash paid. Cash flow timing mismatch (you pay over 5 years but deduct in Year 1) creates negative cash tax burden in Y1 — strong working capital boost.
What's the income limit?
Section 179 cannot exceed your business net income for the year (before §179 deduction). A $200K §179 deduction with only $150K business income limits the immediate deduction to $150K; the $50K carries forward indefinitely to future years. Sole props can combine §179 with W-2 wages from other sources to absorb the deduction. S-corp/partnership: limited at entity AND shareholder/partner level.
📚 Sources & references
Last updated: May 23, 2026