Section 179 Calculator — 2026 Tax Year
The 2025 tax law raised the Section 179 cap to $2.5M+ and made 100% bonus depreciation permanent. Estimate your first-year deduction, your cash tax savings, and what the equipment really costs after taxes — financed or paid in cash.
Finance it — and let the deduction outrun the payments
Section 179 applies to financed equipment the same as a cash purchase: place it in service by December 31 and you can deduct the full price this tax year, even though you're paying it off monthly. Here's your first year at an estimated 9.75% over 60 months:
Your estimated tax savings of $80,000 exceed your first year of payments by $16,627.
Estimates for illustration only, based on 2026 federal limits (Rev. Proc. 2025-32): a $2,560,000 Section 179 cap, $4,090,000 phase-out threshold, and 100% bonus depreciation under the One Big Beautiful Bill Act. Payment estimates use indicative rates and are not an offer or commitment to lend; subject to credit approval. Deduction is limited to business taxable income (unused amounts carry forward); state treatment varies; special caps apply to certain vehicles (e.g., $32,000 for heavy SUVs in 2026). Elevex Capital does not provide tax or legal advice — confirm your situation with your tax advisor.
Section 179 in plain English
Normally, equipment is depreciated over five to seven years — a small deduction each year. Section 179 of the IRS tax code lets your business deduct the full purchase price of qualifying equipment in the year you place it in service, up to $2,560,000 for 2026. Anything above the cap (or above the $4,090,000 phase-out threshold) is swept up by 100% bonus depreciation, which the One Big Beautiful Bill Act made permanent for property acquired after January 19, 2025.
The part most buyers miss: financing doesn't reduce the deduction. Buy a $250,000 machine on a 60-month EFA in November, and you can deduct the full $250,000 on this year's return while having made only a payment or two. For a profitable business, the tax savings frequently exceed the entire first year of payments — the equipment effectively pays you to own it in year one.
Frequently asked questions
What are the Section 179 limits for 2026?
For tax years beginning in 2026, the maximum Section 179 deduction is $2,560,000, with a phase-out that begins once total qualifying equipment placed in service exceeds $4,090,000 (Rev. Proc. 2025-32). The deduction is reduced dollar-for-dollar above that threshold. These higher limits were set by the One Big Beautiful Bill Act of 2025 and are indexed for inflation each year.
Does financed or leased equipment qualify for Section 179?
Yes. Equipment purchased with a loan, an equipment finance agreement (EFA), or a $1 buyout lease qualifies for the full Section 179 deduction in the year it's placed in service — even though you're paying for it over time. That's why many businesses see first-year tax savings that exceed their first year of payments. FMV and TRAC leases are typically treated differently: the payments are generally deductible instead.
What is 100% bonus depreciation and how does it interact with Section 179?
The One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. Section 179 is applied first, then bonus depreciation covers any remaining basis — so most equipment purchases can be fully deducted in year one regardless of which provision does the work. Section 179 requires taxable income to absorb the deduction; bonus depreciation does not.
What equipment qualifies for Section 179?
Most tangible business equipment qualifies: machinery, construction and manufacturing equipment, trucks and trailers, medical devices, IT hardware, off-the-shelf software, office furniture, and certain building improvements. New and used equipment both qualify as long as it's new to your business and used more than 50% for business. Heavy SUVs (6,001–14,000 lbs GVWR) are capped at $32,000 for 2026, though bonus depreciation may cover the rest.
What's the deadline to claim Section 179 for the 2026 tax year?
The equipment must be purchased (or financed) and placed in service — installed and ready for use — by December 31, 2026. A signed purchase order isn't enough; the equipment has to be in service. Financing lead times matter at year end, which is why many businesses lock in equipment financing in Q4.
This page is for general information only and reflects federal limits announced for tax years beginning in 2026. Elevex Capital does not provide tax or legal advice; consult your tax advisor about your situation.
Place it in service before December 31.
Pre-qualify in two minutes with a soft credit check — no impact to your score, no obligation.