How Much Can You Write Off This Year?
The Big Beautiful Bill restores 100% bonus depreciation through 2029, reversing the phase-down that began in 2023. Combined with the Section 179 deduction limit of $2.56 million in 2026, business owners can write off virtually any equipment purchase in Year 1 — a massive cash flow advantage over multi-year depreciation.
Jon Ragsdale· Chief Investment & Policy Intelligence Officer
Published March 30, 2026
Reviewed by David Duley for factual accuracy, source quality, and clarity.
Section 179 and bonus depreciation are not just accounting details. They are policy levers that directly change the after-tax cost of buying equipment, vehicles, and certain property for a business. This page shows how much of a purchase can be pushed into the current year instead of stretched across many years.
That makes this a PRIA-style policy-risk topic. A business can look much more or less cash-flow resilient depending on whether expensing rules are generous, phased down, or restored by Congress.
Section 179 lets business owners deduct the full cost of qualifying equipment in the year it’s purchased — up to $2.56 million in 2026. Combined with 100% bonus depreciation (extended by the Big Beautiful Bill), you can write off virtually any business asset immediately instead of depreciating it over 5–39 years.
How PRIA Approached This
This calculator was written by Jon Ragsdale and reviewed by David Duley. PRIA treats tools like this as household policy-risk explainers, not generic widgets. We separate current law from proposals when relevant, translate public rules into plain English, and present the output as an educational estimate rather than personalized advice.
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Frequently Asked Questions
- What is the Section 179 deduction limit for 2026?
- The 2026 Section 179 deduction limit is projected at $1,250,000. This is the maximum amount a business can deduct for qualifying equipment purchases in a single year. The deduction phases out dollar-for-dollar when total purchases exceed $3,130,000.
- What is the difference between Section 179 and bonus depreciation?
- Section 179 has a dollar limit ($1.25M) but lets you choose which assets to expense, and cannot create a tax loss. Bonus depreciation has no dollar limit and can create a net operating loss, but is all-or-nothing per asset class. Both allow full Year 1 deduction. Best practice: use Section 179 first, then bonus depreciation on the remainder.
- Is 100% bonus depreciation still available in 2026?
- Yes. The Big Beautiful Bill restores 100% bonus depreciation through 2029, reversing the phase-down that began in 2023. Without the BBB, bonus depreciation would have been only 20% in 2026.
- What is the SUV Section 179 limit?
- Vehicles over 6,000 lbs GVWR (most full-size SUVs, pickups, and vans) have a Section 179 cap of $30,500 in 2026. The remaining cost can be deducted through bonus depreciation. Vehicles under 6,000 lbs face stricter "luxury auto" depreciation limits.
- Can I use Section 179 on used equipment?
- Yes. Since the TCJA, both Section 179 and bonus depreciation apply to new and used equipment, as long as the property is new to you (not previously used in your business). This was a significant expansion — prior to TCJA, bonus depreciation was limited to new property.
- Do all states allow Section 179 and bonus depreciation?
- No. While most states conform to federal Section 179 rules (sometimes with lower limits), many states decouple from bonus depreciation entirely. California, Pennsylvania, New Jersey, and others require you to depreciate assets over their full MACRS life on your state return even if you expensed them federally.
Section 179 limits and bonus depreciation rules change with policy. Get alerted when business deduction rules change.
Start Free Watch →Section 179 Calculator: The Short Answer
Section 179 lets many business owners expense qualifying purchases immediately instead of depreciating them over time. The value can be significant because immediate deductions improve current-year cash flow, but the outcome depends on income, purchase volume, asset type, and how Section 179 interacts with bonus depreciation.
Section 179 vs. Bonus Depreciation: What’s the Difference?
Both Section 179 and bonus depreciation let you deduct the full cost of an asset in Year 1, but they work differently:
| Section 179 | Bonus Depreciation | |
|---|---|---|
| Annual limit | $2.56M (2026) | No limit |
| Phase-out | Begins at $4.09M in purchases | None |
| Used assets | New or used | New or used (since TCJA) |
| Creates a loss? | No — limited to business income | Yes — can create an NOL |
| Elect per asset? | Yes — choose which assets | All-or-nothing per asset class |
Best strategy: Use Section 179 first (for flexibility and income limitation), then apply bonus depreciation to the remaining cost. This is the default in our calculator.
Why This Matters For Real Businesses
Expensing rules change the economics of buying now versus waiting. For a business owner thinking about trucks, machinery, software, or facility upgrades, the tax treatment can be the difference between a comfortable purchase and a delayed one. That is especially true when financing costs are high and cash flow matters more than book income.
2026 Section 179 Limits
The maximum Section 179 deduction for 2026 is $2,560,000, increased by OBBBA and inflation-adjusted. The deduction phases out dollar-for-dollar when total Section 179–eligible purchases exceed $4,090,000, reaching zero at $6,650,000. These limits are inflation-adjusted annually.
The SUV Loophole (and Its Limit)
Vehicles over 6,000 lbs GVWR (most full-size SUVs, pickup trucks, and vans) qualify for Section 179, but with a cap of $32,000 in 2026. The remaining cost still qualifies for bonus depreciation. For example, a $75,000 Ford F-250 used 100% for business could get a $32,000 Section 179 deduction plus $43,000 in bonus depreciation — the full cost in Year 1.
Vehicles under 6,000 lbs (sedans, small SUVs) have much lower combined depreciation limits under the “luxury auto” rules — typically around $20,400 in Year 1 even with bonus depreciation.
100% Bonus Depreciation: Back Through 2029
Under the original TCJA, bonus depreciation was 100% through 2022, then scheduled to drop 20% per year: 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026, and 0% in 2027. The Big Beautiful Bill retroactively restores 100% bonus depreciation and extends it through 2029, giving businesses certainty for multi-year capital planning.
State Tax Warning
Not all states conform to federal Section 179 and bonus depreciation rules. Some states have lower Section 179 limits, and many “decouple” from bonus depreciation entirely — requiring you to depreciate assets over their full MACRS life on your state return even if you expensed them federally. California, Pennsylvania, New Jersey, and several others limit or disallow bonus depreciation.
Qualifying Property
Section 179 applies to tangible personal property used in business: machinery, equipment, computers, office furniture, certain vehicles, off-the-shelf software, and qualifying improvements to nonresidential real property (HVAC, roofing, fire protection, security systems). It does not apply to land, buildings (the structure itself), inventory, or property used outside the U.S.
What To Watch Next
If Section 179 and bonus depreciation are part of your business plan, the key monitoring question is whether Congress keeps these rules generous or lets them tighten again. This is exactly the kind of policy change that can alter equipment timing, tax planning, and capital budgeting in the real world.
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