{
  "id": "section-179",
  "version": "4527ad463460",
  "status": "published",
  "name": "Section 179 Calculator",
  "question": "What is my Section 179 deduction?",
  "summary": "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.",
  "category": "finance",
  "subcategory": "tax-and-pay",
  "url": "https://www.acalculator.org/finance/section-179-calculator",
  "markdown": "https://www.acalculator.org/finance/section-179-calculator.md",
  "kind": "function",
  "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.",
  "assumptions": [
    "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 $32,000 of each heavy sport utility vehicle’s cost may be counted; enter at most that much for each.",
    "Married filing separately splits the limit 50/50; the cost includes property your spouse placed in service.",
    "The tax saved is the deduction × the rate you type, an estimate, not tax advice. Bonus depreciation on the remaining cost is not included."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "cost": {
        "title": "Cost of Section 179 property placed in service",
        "description": "Business cost of all Section 179 property placed in service in 2026 (Form 4562 line 2).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "elect": {
        "title": "Cost you elect to expense (optional)",
        "description": "The part of that cost you choose to expense (line 8). Empty means all of it.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "income": {
        "title": "Business income",
        "description": "Taxable income from businesses you actively run, plus wages, before the Section 179 deduction (line 11).",
        "type": "number",
        "x-unit": "USD",
        "minimum": -1000000000000,
        "maximum": 1000000000000
      },
      "carry": {
        "title": "Carryover from 2025 (optional)",
        "description": "Section 179 expense from earlier years that the income limit held back (line 10).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "mfs": {
        "title": "Married filing separately",
        "description": "Spouses filing separately share one limit: each takes half unless they choose another split.",
        "type": "boolean"
      },
      "rate": {
        "title": "Your tax rate (optional)",
        "description": "Your marginal tax rate, to estimate the tax the deduction saves.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 100
      }
    }
  },
  "outputs": {
    "deduction": {
      "label": "Section 179 deduction",
      "description": "Tentative deduction + carryover, but no more than the business income limit (line 12).",
      "format": "money"
    },
    "dollarLimit": {
      "label": "Dollar limit for 2026",
      "description": "$2,560,000 − the phase-out reduction, not below $0; half when married filing separately (line 5).",
      "format": "money"
    },
    "reduction": {
      "label": "Phase-out reduction",
      "description": "Cost of property placed in service − $4,090,000, not below $0 (line 4).",
      "format": "money"
    },
    "tentative": {
      "label": "Tentative deduction",
      "description": "The smaller of the elected cost and the dollar limit (line 9).",
      "format": "money"
    },
    "incomeLimit": {
      "label": "Business income limit",
      "description": "The smaller of business income (not below $0) and the dollar limit (line 11).",
      "format": "money"
    },
    "carryForward": {
      "label": "Carryover to 2027",
      "description": "Tentative deduction + carryover − the deduction (line 13).",
      "format": "money"
    },
    "taxSaved": {
      "label": "Estimated tax saved",
      "description": "The deduction × your tax rate.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "cost": 300000,
      "income": 500000,
      "mfs": false,
      "rate": 24
    },
    "outputs": {
      "deduction": 300000,
      "dollarLimit": 2560000,
      "reduction": 0,
      "tentative": 300000,
      "incomeLimit": 500000,
      "carryForward": 0,
      "taxSaved": 72000
    },
    "text": "With $300,000.00 of property and $500,000.00 of business income, the 2026 Section 179 deduction is $300,000.00."
  },
  "examples": [
    {
      "given": {
        "cost": 300000,
        "income": 500000,
        "rate": 24
      },
      "expect": {
        "dollarLimit": 2560000,
        "tentative": 300000,
        "deduction": 300000,
        "carryForward": 0,
        "taxSaved": 72000
      },
      "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; hand calculation in content.mdx; Python 3 check in docs/progress/WP-128/xcheck.py"
    },
    {
      "given": {
        "cost": 4500000,
        "income": 5000000
      },
      "expect": {
        "reduction": 410000,
        "dollarLimit": 2150000,
        "tentative": 2150000,
        "deduction": 2150000
      },
      "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); hand calculation in content.mdx; Python 3 check in docs/progress/WP-128/xcheck.py"
    },
    {
      "given": {
        "cost": 6650000,
        "income": 10000000
      },
      "expect": {
        "reduction": 2560000,
        "dollarLimit": 0,
        "deduction": 0
      },
      "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); Python 3 check in docs/progress/WP-128/xcheck.py"
    },
    {
      "given": {
        "cost": 100000,
        "income": 60000,
        "carry": 10000,
        "rate": 22
      },
      "expect": {
        "tentative": 100000,
        "incomeLimit": 60000,
        "deduction": 60000,
        "carryForward": 50000,
        "taxSaved": 13200
      },
      "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); hand calculation in content.mdx; Python 3 check in docs/progress/WP-128/xcheck.py"
    },
    {
      "given": {
        "cost": 4500000,
        "elect": 1000000,
        "income": 2000000,
        "mfs": true
      },
      "expect": {
        "dollarLimit": 1075000,
        "tentative": 1000000,
        "deduction": 1000000
      },
      "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; Python 3 check in docs/progress/WP-128/xcheck.py"
    }
  ],
  "sources": [
    "IRS, Rev. Proc. 2025-32 (Internal Revenue Bulletin 2025-45), section 4.24, Election to Expense Certain Depreciable Assets: for tax years beginning in 2026 the aggregate cost of section 179 property a taxpayer elects to expense cannot exceed $2,560,000, reduced by the cost of section 179 property placed in service over $4,090,000; a sport utility vehicle counts for at most $32,000. https://www.irs.gov/irb/2025-45_IRB (retrieved 2026-10-18)",
    "IRS, Instructions for Form 4562 (2025), Part I: line 2 includes property a spouse placed in service; line 5 married filing separately takes 50%; line 10 carryover; line 11 business income limitation (wages included; figured without the section 179 deduction, half of self-employment tax or a net operating loss deduction); line 12. https://www.irs.gov/instructions/i4562 (retrieved 2026-10-18)",
    "IRS, Publication 946 (2025), How To Depreciate Property, chapter 2: qualifying property, more than 50% business use, property that does not qualify; chapter 3: 100% special depreciation allowance for property acquired after January 19, 2025. https://www.irs.gov/publications/p946 (retrieved 2026-10-18)"
  ],
  "related": [
    "depreciation",
    "car-depreciation",
    "self-employment-tax",
    "income-tax"
  ],
  "changelog": []
}