Section 179 lets a business immediately expense qualifying equipment instead of depreciating it over years — but the dollar cap phases out once total purchases for the year get large enough.
How it works
The deduction is the smallest of the equipment cost, the dollar limit (reduced dollar-for-dollar by any excess of total qualifying purchases over the phase-out threshold), and the business’s taxable income before the deduction.
What this does not include
Section 179 can’t create or increase a net operating loss — the business-income limit here reflects that; any amount that would exceed taxable income simply carries forward instead, a carryforward this calculator doesn’t track across years.
How to use this calculator
- Enter the equipment cost and total qualifying equipment placed in service this year.
- Enter business income and the current-year dollar limit and phase-out threshold.
Frequently asked questions
How is this different from bonus depreciation?
Section 179 is capped by a dollar limit and by business income and phases out at high purchase volumes; bonus depreciation has no dollar cap and can create a net operating loss, covered by this site’s separate bonus depreciation calculator.
Does Section 179 apply to used equipment?
Yes — unlike bonus depreciation’s original new-property-only rule (since relaxed), Section 179 has long applied to both new and used qualifying property.
What happens to an amount that exceeds business income?
It carries forward to future years rather than being lost, similar to how an unused Section 179 deduction generally works when the income limitation binds.
