What is my Section 179 deduction?
Type the cost of equipment you placed in service in 2026 and your business income. The Section 179 calculator applies the 2026 limits from Form 4562 and shows your deduction and the tax it saves.
- Section 179 deduction
- $300,000.00
With $300,000.00 of property and $500,000.00 of business income, the 2026 Section 179 deduction is $300,000.00.
- Dollar limit for 2026
- $2,560,000.00
- Phase-out reduction
- $0.00
- Tentative deduction
- $300,000.00
- Business income limit
- $500,000.00
- Carryover to 2027
- $0.00
- Estimated tax saved
- $72,000.00
Section 179 deduction: $300,000.00. With $300,000.00 of property and $500,000.00 of business income, the 2026 Section 179 deduction is $300,000.00.
Section 179 deduction by cost of Section 179 property placed in service
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Works out the 2026 Section 179 expense deduction on Form 4562: the $2,560,000 limit, its phase-out above $4,090,000 of property, the business income limit, the carryover, and the tax it saves.
Example with the default inputs (Cost of Section 179 property placed in service $300,000.00, Business income $500,000.00, Married filing separately No, Your tax rate (optional) 24%): With $300,000.00 of property and $500,000.00 of business income, the 2026 Section 179 deduction is $300,000.00.
Method: Line 4 = max(0, cost − $4,090,000). Line 5 = max(0, $2,560,000 − line 4), × 50% if married filing separately. Line 9 = the smaller of the elected cost and line 5. Line 11 = the smaller of business income (not below $0) and line 5. Line 12 (deduction) = the smaller of line 9 + carryover and line 11. Line 13 = line 9 + carryover − line 12. Tax saved = deduction × tax rate.
- Tax years beginning in 2026 (IRS Rev. Proc. 2025-32). The cost is the business-use cost of property that qualifies for Section 179.
- At most $32,000 of each heavy sport utility vehicle’s cost may be counted; enter at most that much for each.
- Married filing separately splits the limit 50/50; the cost includes property your spouse placed in service.
- The tax saved is the deduction × the rate you type, an estimate, not tax advice. Bonus depreciation on the remaining cost is not included.
Worked examples
Each example is checked against the calculator on every build.
- Cost of Section 179 property placed in service $300,000.00, Business income $500,000.00, Your tax rate (optional) 24% gives Dollar limit for 2026 $2,560,000.00, Tentative deduction $300,000.00, Section 179 deduction $300,000.00, Carryover to 2027 $0.00, Estimated tax saved $72,000.00.Source: IRS Rev. Proc. 2025-32 (IRB 2025-45), section 4.24: for 2026 the limit is $2,560,000, reduced by the cost of section 179 property placed in service over $4,090,000, https://www.irs.gov/irb/2025-45_IRB; IRS Instructions for Form 4562 (2025), Part I lines 1 to 13 (line 5: married filing separately takes 50%; line 11: business income limitation), https://www.irs.gov/instructions/i4562
- Cost of Section 179 property placed in service $4,500,000.00, Business income $5,000,000.00 gives Phase-out reduction $410,000.00, Dollar limit for 2026 $2,150,000.00, Tentative deduction $2,150,000.00, Section 179 deduction $2,150,000.00.Source: IRS Rev. Proc. 2025-32 (IRB 2025-45), section 4.24: for 2026 the limit is $2,560,000, reduced by the cost of section 179 property placed in service over $4,090,000, https://www.irs.gov/irb/2025-45_IRB; IRS Instructions for Form 4562 (2025), Part I lines 1 to 13 (line 5: married filing separately takes 50%; line 11: business income limitation), https://www.irs.gov/instructions/i4562 (lines 3 to 5)
- Cost of Section 179 property placed in service $6,650,000.00, Business income $10,000,000.00 gives Phase-out reduction $2,560,000.00, Dollar limit for 2026 $0.00, Section 179 deduction $0.00.Source: IRS Rev. Proc. 2025-32 (IRB 2025-45), section 4.24: for 2026 the limit is $2,560,000, reduced by the cost of section 179 property placed in service over $4,090,000, https://www.irs.gov/irb/2025-45_IRB (2,560,000 + 4,090,000 = 6,650,000)
- Cost of Section 179 property placed in service $100,000.00, Business income $60,000.00, Carryover from 2025 (optional) $10,000.00, Your tax rate (optional) 22% gives Tentative deduction $100,000.00, Business income limit $60,000.00, Section 179 deduction $60,000.00, Carryover to 2027 $50,000.00, Estimated tax saved $13,200.00.Source: IRS Instructions for Form 4562 (2025), Part I lines 1 to 13 (line 5: married filing separately takes 50%; line 11: business income limitation), https://www.irs.gov/instructions/i4562 (line 11 business income limitation; line 13 carryover)
- Cost of Section 179 property placed in service $4,500,000.00, Cost you elect to expense (optional) $1,000,000.00, Business income $2,000,000.00, Married filing separately yes gives Dollar limit for 2026 $1,075,000.00, Tentative deduction $1,000,000.00, Section 179 deduction $1,000,000.00.Source: IRS Instructions for Form 4562 (2025), Part I lines 1 to 13 (line 5: married filing separately takes 50%; line 11: business income limitation), https://www.irs.gov/instructions/i4562 (line 5: multiply by 50%); IRS Rev. Proc. 2025-32 (IRB 2025-45), section 4.24: for 2026 the limit is $2,560,000, reduced by the cost of section 179 property placed in service over $4,090,000, https://www.irs.gov/irb/2025-45_IRB
How it works
The calculator follows Form 4562 Part I with the 2026 limits:
- Line 2: cost of Section 179 property placed in service in 2026 (business-use cost).
- Line 4, phase-out reduction = cost − $4,090,000, or $0 if that is negative.
- Line 5, dollar limit = $2,560,000 − line 4, or $0 if that is negative. Married filing separately: line 5 × 50%.
- Line 8, elected cost: what you choose to expense; with the box empty, all of line 2. It cannot be more than line 2.
- Line 9, tentative deduction = the smaller of line 5 and line 8.
- Line 11, business income limit = the smaller of business income (taken as $0 if it is a loss) and line 5.
- Line 12, Section 179 deduction = line 9 + the carryover from 2025 (line 10), but no more than line 11.
- Line 13, carryover to 2027 = line 9 + line 10 − line 12.
- Estimated tax saved = line 12 × your tax rate ÷ 100 (shown when a rate is typed).
Exact arithmetic. Every amount is read as the exact decimal you typed, each line is an exact fraction, and the results are rounded once to cents, half up.
Figures that change each year
These 2026 figures are adjusted for inflation each year. The data check should compare them with the next year's IRS revenue procedure.
| Figure | 2026 value | Source | Next update |
|---|---|---|---|
| Section 179 dollar limit (line 1) | $2,560,000 | Rev. Proc. 2025-32 section 4.24 | The IRS inflation-adjustment revenue procedure for 2027 (October to November 2026) |
| Phase-out threshold (line 3) | $4,090,000 | Rev. Proc. 2025-32 section 4.24 | Same |
| Heavy SUV cost limit (stated, not computed) | $32,000 | Rev. Proc. 2025-32 section 4.24 | Same |
When the data is out of date
After April 15, 2027 the page keeps using the 2026 limits and says so above the result.
Assumptions
- Tax years beginning in 2026. Every amount is at most $1 trillion; business income may be negative (a loss).
- The cost is the business-use cost of qualifying property used more than 50% for business; each heavy SUV counts for at most $32,000.
- Married filing separately splits the limit 50/50.
- Bonus depreciation is not included. The tax saved is an estimate, not tax advice.
Worked examples by hand
$300,000 of equipment, $500,000 of business income, 24%. Line 4 = $0 (under $4,090,000); line 5 = $2,560,000; line 9 = $300,000; line 11 = $500,000; deduction = $300,000; carryover $0; tax saved = 300,000 × 24% = $72,000.
$4,500,000 of property. Line 4 = 4,500,000 − 4,090,000 = $410,000; line 5 = 2,560,000 − 410,000 = $2,150,000; electing all of it, line 9 = $2,150,000; with $5,000,000 of income, the deduction is $2,150,000.
$6,650,000 of property. Line 4 = $2,560,000, so line 5 and the deduction are $0.
The income limit. $100,000 elected, $10,000 carried over from 2025, $60,000 of business income: line 9 = $100,000; line 11 = $60,000; deduction = the smaller of 110,000 and 60,000 = $60,000; carryover to 2027 = 110,000 − 60,000 = $50,000; tax saved at 22% = $13,200.
Married filing separately. $4,500,000 of property: line 5 = 2,150,000 × 50% = $1,075,000. Electing $1,000,000 with $2,000,000 of income gives a $1,000,000 deduction.
Other questions people ask
How is the Section 179 deduction calculated?
Start from the 2026 limit of $2,560,000 and take off every dollar of property placed in service above $4,090,000. The deduction is the cost you elect, up to that limit, plus any carryover, but no more than your business income. $300,000 of equipment with $500,000 of business income gives a $300,000 deduction.
What are the 2026 Section 179 limits?
The most you can expense is $2,560,000. It falls dollar for dollar once the Section 179 property you place in service passes $4,090,000, so it is gone at $6,650,000. A heavy sport utility vehicle counts for at most $32,000. These figures are from IRS Rev. Proc. 2025-32 and change every year.
What is the business income limit?
The deduction cannot be more than your taxable income from businesses you actively run, plus any wages you earn as an employee, figured before the Section 179 deduction, the deduction for half of self-employment tax and any net operating loss deduction. What the limit holds back carries forward to next year.
What property qualifies for Section 179?
Machinery, equipment, vehicles, furniture and other tangible personal property, off-the-shelf software, and some improvements to nonresidential buildings: roofs, heating, ventilation and air conditioning, fire protection and alarm systems, security systems, and qualified improvement property. It must be used more than 50% for business. Land, land improvements such as parking lots and fences, and buildings do not qualify.
How does married filing separately work?
Spouses filing separately are treated as one taxpayer for the limit: the cost includes property either spouse placed in service, and each spouse takes half of the dollar limit unless they choose another split.
What about bonus depreciation?
Property acquired after January 19, 2025 can take a 100% special depreciation allowance (bonus depreciation) under P.L. 119-21, with no dollar limit and no business income limit. This calculator covers Section 179 only; bonus depreciation on the rest of the cost is not included.
How much tax does the deduction save?
Roughly the deduction × your marginal tax rate: a $300,000 deduction at 24% saves about $72,000. The real saving depends on your brackets, state tax and self-employment tax, so treat it as an estimate.