Section 179 Equipment Depreciation Calculator – Bonus Depreciation & Vehicle Cap (2026)

Calculate immediate IRS Section 179 tax deductions and bonus depreciation on business equipment, software, and heavy vehicles (over 6,000 lbs GVWR). Includes 2026 TCJA phaseout limits.

Total Business Equipment / Software Cost ($)

Business Owner Marginal Tax Bracket (%)

Business Use Percentage (%)

Heavy SUV / Truck (GVWR 6,000–14,000 lbs, $30,500 Cap)

Total Year-One Tax Deduction

$120,000

Section 179 + Bonus write-off

Immediate Tax Cash Savings

$44,400

Direct income tax reduction

Depreciation Structure Breakdown:

First-Year Write-Off Split:$120,000 (Sec 179)

Net Out-of-Pocket Equipment Cost:$75,600

2026 Section 179 Limits: The maximum Section 179 expense deduction is $1,220,000 with a total equipment purchase phase-out cap starting at $3,050,000.

Tax and wealth planning estimate based on official 2026 IRS codes and statutory rules. This model does not constitute certified CPA tax preparation, ERISA legal counsel, or fiduciary investment advisory.

What is IRS Section 179 & How Does It Work?

Section 179 of the Internal Revenue Code allows businesses to deduct the full purchase price of qualifying equipment, machinery, off-the-shelf commercial software, and business vehicles purchased or financed during the tax year, rather than capitalizing and depreciating them slowly over 5 to 7 years.

Qualifying Property Under Section 179

Machinery & Manufacturing Equipment: Servers, computers, manufacturing tools, CNC mills, office furniture, printing hardware.
Off-the-Shelf Software: Commercially available software not customized for proprietary use.
Heavy Vehicle GVWR Rule: Passenger vehicles weighing between 6,000 and 14,000 pounds Gross Vehicle Weight Rating (GVWR) qualify for an accelerated Section 179 deduction up to $30,500, making popular heavy trucks and commercial vans a prime business write-off.

Section 179 vs Bonus Depreciation

While Section 179 is capped at $1,220,000 and cannot create an overall net operating loss (NOL), Bonus Depreciation under the Tax Cuts and Jobs Act (TCJA) allows deducting additional percentages of the remaining basis (phasing from 100% in 2022 to 60% in 2024, 40% in 2025, and 20% in 2026).

Frequently asked questions

Can Section 179 create a net tax loss for my business?

No. Section 179 deductions are strictly limited to your business net taxable income. You cannot use Section 179 to create a net operating loss. However, unused deductions carry forward indefinitely to future tax years.

Does used equipment qualify for Section 179?

Yes! Both brand-new and 'new-to-you' used equipment qualify, provided it is acquired in an arm's-length transaction and put into active business service during the calendar tax year.

What is the business use percentage requirement?

Property must be used more than 50% for business purposes to qualify for Section 179. If business use is between 50% and 99%, the deduction is prorated accordingly.

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