# What is my Section 179 deduction?

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.

- Page: https://www.acalculator.org/finance/section-179-calculator
- JSON spec: https://www.acalculator.org/finance/section-179-calculator.json
- Version: 4527ad463460

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| cost | Cost of Section 179 property placed in service | Business cost of all Section 179 property placed in service in 2026 (Form 4562 line 2). |
| elect | Cost you elect to expense (optional) | The part of that cost you choose to expense (line 8). Empty means all of it. |
| income | Business income | Taxable income from businesses you actively run, plus wages, before the Section 179 deduction (line 11). |
| carry | Carryover from 2025 (optional) | Section 179 expense from earlier years that the income limit held back (line 10). |
| mfs | Married filing separately | Spouses filing separately share one limit: each takes half unless they choose another split. |
| rate | Your tax rate (optional) | Your marginal tax rate, to estimate the tax the deduction saves. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| deduction | Section 179 deduction | Tentative deduction + carryover, but no more than the business income limit (line 12). |
| dollarLimit | Dollar limit for 2026 | $2,560,000 − the phase-out reduction, not below $0; half when married filing separately (line 5). |
| reduction | Phase-out reduction | Cost of property placed in service − $4,090,000, not below $0 (line 4). |
| tentative | Tentative deduction | The smaller of the elected cost and the dollar limit (line 9). |
| incomeLimit | Business income limit | The smaller of business income (not below $0) and the dollar limit (line 11). |
| carryForward | Carryover to 2027 | Tentative deduction + carryover − the deduction (line 13). |
| taxSaved | Estimated tax saved | The deduction × your tax rate. |

## 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.

## Worked examples

1. cost = $300,000.00, income = $500,000.00, rate = 24% gives dollarLimit = $2,560,000.00, tentative = $300,000.00, deduction = $300,000.00, carryForward = $0.00, taxSaved = $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.
2. cost = $4,500,000.00, income = $5,000,000.00 gives reduction = $410,000.00, dollarLimit = $2,150,000.00, tentative = $2,150,000.00, 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).
3. cost = $6,650,000.00, income = $10,000,000.00 gives reduction = $2,560,000.00, dollarLimit = $0.00, 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).
4. cost = $100,000.00, income = $60,000.00, carry = $10,000.00, rate = 22% gives tentative = $100,000.00, incomeLimit = $60,000.00, deduction = $60,000.00, carryForward = $50,000.00, taxSaved = $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).
5. cost = $4,500,000.00, elect = $1,000,000.00, income = $2,000,000.00, mfs = yes gives dollarLimit = $1,075,000.00, tentative = $1,000,000.00, 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.

## FAQ

### 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.

## 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)