How much equipment cost can I deduct with Section 179 and bonus depreciation?

Use this free equipment-expensing calculator to separate Section 179, bonus depreciation, first-year MACRS, and an income-limited carryover. The acquisition date and placed-in-service date determine which bonus rules apply. Only eligible nonvehicle 5- or 7-year equipment with the half-year convention is supported.

Tax year

Asset classification

Equipment purchase cost

Business use (%)

Tax acquisition date

Use the tax acquisition date, not payment or delivery date. Binding-contract and self-construction rules need separate review.

Placed-in-service date

All Section 179 eligible business cost placed this year

Include this asset, assets with no Section 179 election, and applicable joint-spouse business cost. Exclude personal-use cost.

Section 179 elections for other assets

Requested Section 179 election for this asset

Remaining Section 179 business-income limit

Remaining Form 4562 line 11 income after other asset elections and all non-179 deductions, including this asset's bonus/MACRS. Not gross receipts.

GDS recovery period

Bonus election

Unrelated-party purchase; sole proprietor; half-year convention; no prior carryover or special asset rules

No ADS, listed property, vehicles, buildings, MFS spouse-limit allocation, short tax year, self-construction, binding-contract date dispute, or used property previously used by you. The half-year convention must be valid across all applicable assets.

section 179 calculator

Quick answer

A first-year equipment deduction can combine an income-limited Section 179 election, date-dependent bonus depreciation, and MACRS on remaining basis.

Also answers

bonus depreciation calculator
equipment expensing calculator
section 179 income limit

Good fit when

Sole proprietors comparing equipment-expensing elections
Equipment purchases with known tax acquisition dates and valid half-year treatment

Have ready

Tax year and tax acquisition/placed-in-service dates
Cost, business use, and 5- or 7-year classification
Aggregate eligible cost and other elections
Requested election and remaining business-income limit
Bonus election and eligibility confirmations

Result you get

Current Section 179 deduction, deferred election, bonus rate and deduction, regular first-year depreciation, reduced annual limit, and remaining basis.

Building depreciation Annualized installment method 2027 published amounts and planning status

How this calculation works

Multiply purchase cost by business use; apply the taxpayer-wide Section 179 aggregate-cost phaseout and subtract other asset elections.
Limit the asset election by available dollar room and its business basis, then apply the supplied remaining Form 4562 business-income limit.
Reserve elected cost, including income-limited carryover, from the bonus/MACRS basis; apply the acquisition-date bonus rate to the balance.
Apply the first-year half-year MACRS percentage for confirmed 5- or 7-year equipment to the post-bonus basis.
2027 indexed limits are not presented as published law. The 2027 option uses a labeled 2026 provisional baseline; enacted nonindexed rules are kept separate.

Common mistakes and caveats

Deduction planning only, not complete Form 4562, tax savings, QBI, or state conformity. Business income must already reflect applicable non-179 depreciation and other elections.
Only unrelated-party purchased nonlisted equipment in a calendar-year sole proprietorship. No prior carryovers, MFS spouse allocation, binding-contract date disputes, self-construction, ADS, buildings/QIP, special production property, vehicles, or mid-quarter convention.
A used asset previously used by you, related-party acquisition, basis credit, or later recapture needs separate review.

FAQ

What are the 2025 and 2026 Section 179 dollar limits?

The 2025 maximum is $2,500,000, reduced dollar for dollar above $4,000,000 of qualifying cost placed in service. The 2026 maximum is $2,560,000 with a $4,090,000 phaseout threshold. These are taxpayer-wide limits, not a fresh allowance for each asset.

Is bonus depreciation always 100%?

No. Eligible acquisitions after January 19, 2025 generally qualify for 100%. Earlier eligible acquisitions use the legacy placed-in-service schedule: 40% in 2025, 20% in 2026, then zero for ordinary equipment in 2027. The supported 2025 transition election substitutes 40% for eligible new-rule property.

Can I use a passenger car or an SUV?

No. Vehicle caps, listed-property restrictions, SUV expensing limits, and transportation exceptions are not modeled. Choosing vehicle classification blocks the result instead of treating a car as unrestricted equipment.

Why can a Section 179 election exceed the deduction shown?

An otherwise permitted election can be deferred by the business-income limitation. The tool shows that deferred amount separately. Cost excluded by the annual dollar limit is not the same as an income-limited carryover.

Does the business-use percentage affect the basis?

Yes. Only the business portion is included. This model requires business use above 50% and confirmed eligibility. A later reduction in business use may create recapture that is outside this first-year calculation.

Can I assume the half-year convention because I bought one item?

No. The convention depends on all relevant property placed in service, including the late-year basis test. This calculator requires confirmation that half-year treatment is valid; mid-quarter and short-year cases are blocked.

Last updated & sources

Last updated October 13, 2026.

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