Section 179 Deduction Calculator
2026Calculate Section 179 tax deduction for business equipment purchases. 2026 limit: $2,560,000.
By Konstantin Iakovlev · Updated April 2026 · Source: IRS — Publication 946, How To Depreciate Property
Section 179 Deduction
$100,000.00
Tax Savings
$24,000.00
Net Cost After Deduction
$76,000.00
Deduction Details
| Equipment Cost | $100,000.00 |
| 2026 Section 179 Limit | $2.6M |
| Available Deduction Limit | $2,560,000.00 |
| Section 179 Deduction | $100,000.00 |
| Marginal Tax Rate | 24% |
| Tax Savings | $24,000.00 |
| Effective Net Cost | $76,000.00 |
Use the Section 179 Deduction Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Section 179 lets a business expense the full cost of qualifying equipment in the year it is placed in service rather than spreading the deduction across several years of depreciation. For purchases made in 2026, the maximum deduction is $2,560,000, and the phase-out begins once $4,090,000 of qualifying property is placed in service. Taking the deduction can pull down taxable income considerably in the year of purchase.
The estimate starts from the total cost of your qualifying equipment. When that total falls under the 2026 limit of $2,560,000, the entire amount is generally deductible. Once qualifying property placed in service climbs past the phase-out threshold of $4,090,000, the maximum deduction shrinks dollar-for-dollar by every dollar above that threshold.
Two limits are easy to overlook. The deduction cannot exceed your business's taxable income, and the property has to genuinely qualify, which generally means tangible personal property used in your trade or business. State conformity is another frequent blind spot, since some states do not follow the federal Section 179 rules in full and may cap or disallow the deduction on your state return.
Example: Business Equipment Purchase
- 1 A business purchases $2,800,000 worth of new manufacturing equipment in 2026. Their total qualifying property placed in service for the year is $2,800,000.
- 2 Since the total qualifying property ($2,800,000) is below the phase-out threshold ($4,090,000), no phase-out reduction applies. However, the deduction is capped at the 2026 maximum of $2,560,000.
- 3 The business can claim a Section 179 deduction of $2,560,000 for 2026.
- 4 This deduction directly reduces the business's taxable income, potentially leading to significant tax savings in the current year. The remaining $240,000 of equipment cost ($2,800,000 - $2,560,000) would then be subject to regular depreciation rules — or 100% bonus depreciation, which the One Big Beautiful Bill Act made permanent.
Source: IRS — Publication 946, How To Depreciate Property · Last updated: April 2026
Frequently Asked Questions
What is the Section 179 deduction limit for 2026?
What qualifies for Section 179 deduction?
Can I use Section 179 for a vehicle?
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