Section 179 Calculator for Tax Deductions in 2026
- Rick Ruberg
- 1 day ago
- 3 min read
Thanks to the One Big Beautiful Bill Act (OBBB), the Section 179 deduction limit has increased to $2,500,000 and 100% bonus depreciation is back permanently. Creating quite the opportunity to significantly reduce your tax liability and accelerate cash flow.
Our Section 179 Deduction Calculator provides an instant estimate of your potential first-year tax savings, helping you make informed equipment purchase decisions and maximize your deductions.
How to Use the Section 179 Deduction Calculator
Get quick estimates on tax savings across all federal tax brackets with just a single input! Our calculator automatically compares Section 179, 100% bonus depreciation, and regular depreciation to show you the maximum first-year benefit available for your equipment purchase.
Enter Your Equipment Cost
Input the total purchase price of your qualifying business equipment, vehicles, software, or qualified improvement property. The calculator accepts any amount and will automatically apply the appropriate 2026 Section 179 limits and phase-out thresholds.
What Qualifies: Tangible personal property like machinery, computers, office furniture, business vehicles (with specific limitations for SUVs), off-the-shelf software, and certain interior improvements to nonresidential property.
Review Your Complete Tax Savings Analysis
Once you click "Calculate Tax Savings," the calculator instantly displays:
Equipment Purchase Summary
Equipment Cost: Your total purchase amount
Section 179 Deduction: Amount eligible for immediate Section 179 expensing (up to $2,500,000 in 2026)
Bonus Depreciation (100%): Full first-year depreciation on qualifying assets
Tax Savings by Bracket
See your potential federal tax savings across the tax brackets (22%, 24%, 32%, 35%, and 37%). The calculator shows three scenarios for each bracket because each has different advantages depending on your situation:
Section 179: Best when you need to maximize deductions but are limited by business income (cannot create a loss)
Bonus Depreciation: Ideal for large purchases or when you want to create/increase a net operating loss
Regular Depreciation: Baseline comparison showing the standard approach without acceleration
This comparison helps you understand the dramatic difference between accelerated methods and traditional depreciation.
Section 179 Frequently Asked Questions
What Changed Under the One Big Beautiful Bill Act?
H.R.1 (effective for tax years beginning after December 31, 2024) transformed business equipment expensing by:
Doubling the Section 179 limit from $1,220,000 to $2,500,000
Raising the phase-out threshold from $3,050,000 to $4,000,000
Making permanent 100% bonus depreciation
Which method should I use?
Most businesses benefit from either Section 179 or bonus depreciation. Your tax advisor can help you choose based on your current income, future projections, and overall tax strategy.
Is Used Equipment Eligible for Section 179?
Yes! Section 179 applies to both new and used equipment, as long as it's new to you. The equipment must be purchased from an unrelated party in an arm's-length transaction. You cannot claim Section 179 on equipment purchased from family members, related businesses you control, or inherited/gifted property.
Does the Date of My Purchase Matter?
The critical date isn't when you purchase, it's when you place it in service. If you buy equipment in December 2026 but don't install or use it until January 2027, the deduction moves to your 2027 tax return.
Can I Finance or Lease Equipment and Still Use Section 179?
Financed purchases: Yes, absolutely. You can claim the full Section 179 deduction on financed equipment in the year it's placed in service, even though you haven't paid the full amount yet. This creates powerful cash flow benefits.
Leased equipment: Generally no. As the lessee, you don't own the property, so the lessor (owner) claims depreciation. You simply deduct your lease payments as operating expenses. Exception: Certain lease-to-own arrangements may qualify.
A Note from the Author
Section 179 has undergone some significant changes thanks to the One Big Beautiful Bill Act, and we’ve created this handy calculator to help you visualize and estimate your potential savings.
We're constantly improving our resources on this site. Tax law is complex and always changing. If you notice any errors, outdated information, or areas where we could provide better clarity, please let us know. We review all feedback and regularly update our tools to reflect the latest guidance.
We’re all navigating these tax changes together... your feedback is invaluable in helping us assist others.
✌️ Out -Rick
Disclaimer: This is not tax advice. This calculator provides general estimates for educational purposes. Your actual tax situation depends on numerous factors including business income, entity type, state conformity rules, and specific asset classifications. Always work with a qualified tax professional before making equipment purchase decisions or filing tax elections.
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