Section 179 Deduction Calculator
Enter your equipment or vehicle purchase details to calculate your Section 179 deduction, bonus depreciation, and estimated tax savings for 2024.
Enter your purchase details above and click Calculate to see your Section 179 deduction breakdown, bonus depreciation, total first-year write-off, estimated tax savings, and net equipment cost after deductions.
Maximize Your Section 179 Deduction
Make the most of your equipment purchases with these tools and services.
Pre-Computed Section 179 Examples for 2024
The following table shows calculated deductions for common business purchases at a 24% combined tax rate with 100% business use. These examples illustrate how Section 179 works for different asset types and price points, giving you a quick reference before using the calculator above with your specific numbers.
| Purchase | Section 179 | Bonus Depr. | Total 1st Year | Tax Savings | Net Cost |
|---|---|---|---|---|---|
| $50K Pickup Truck (F-250) | $50,000 | $0 | $50,000 | $12,000 | $38,000 |
| $100K Manufacturing Equipment | $100,000 | $0 | $100,000 | $24,000 | $76,000 |
| $500K Total Equipment Purchase | $500,000 | $0 | $500,000 | $120,000 | $380,000 |
What Is Section 179?
Section 179 of the Internal Revenue Code allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. Instead of depreciating the cost of an asset over its useful life (typically 5 to 15 years depending on the asset class), Section 179 lets you write off the entire cost in the year the asset is placed in service. This immediate expensing provision was designed by Congress to encourage small and medium-sized businesses to invest in themselves by making capital equipment purchases more affordable through upfront tax savings.
For the 2024 tax year, businesses can deduct up to $1,220,000 of qualifying equipment purchases under Section 179. This deduction begins to phase out dollar-for-dollar when total qualifying purchases exceed $3,050,000, and is completely eliminated when purchases reach $4,270,000. These limits are adjusted for inflation each year by the IRS.
To qualify for Section 179, the property must be tangible personal property used in the active conduct of your business, it must be purchased (not leased from a related party), and it must be placed in service during the current tax year. Qualifying property includes machinery, equipment, vehicles (with specific limits), computers, office furniture, off-the-shelf software, and certain improvements to nonresidential real property. The property must be used more than 50% for business purposes; if business use falls to 50% or below, the entire Section 179 deduction may need to be recaptured in future years.
Section 179 vs Bonus Depreciation: Key Differences
While both Section 179 and bonus depreciation allow businesses to accelerate the tax benefits of capital purchases, they operate under different rules and have distinct advantages. Understanding the interplay between these two provisions is essential for maximizing your first-year deductions and overall tax strategy.
Section 179 is an elective deduction with a hard annual cap of $1,220,000 for 2024. It cannot create or increase a net operating loss, meaning your Section 179 deduction is limited to your taxable business income. If your Section 179 deduction exceeds your business income, the excess carries forward to future years. You must specifically elect Section 179 on your tax return by filing Form 4562.
Bonus depreciation is an automatic first-year depreciation allowance with no dollar limit. For 2024, the rate is 60%, down from 100% in 2022 and 80% in 2023. Unlike Section 179, bonus depreciation can create a net operating loss, which can then be carried forward to offset income in future years. Bonus depreciation applies to the cost remaining after any Section 179 deduction, making the two provisions complementary rather than mutually exclusive.
Optimal strategy: Most businesses benefit from applying Section 179 first (up to the limit), then using bonus depreciation on the remaining cost. The calculator above automatically applies both deductions in this optimal order, followed by regular MACRS depreciation on any residual amount.
2024 Section 179 Limits at a Glance
Frequently Asked Questions
What is the Section 179 deduction limit for 2024?
For tax year 2024, the maximum Section 179 deduction is $1,220,000. This means you can deduct up to $1,220,000 of qualifying equipment and property purchases in the year they are placed in service. The deduction begins to phase out dollar-for-dollar when total qualifying purchases exceed $3,050,000, and is completely eliminated when purchases reach $4,270,000.
What qualifies for Section 179 deduction?
Most tangible personal property used in your business qualifies for Section 179, including equipment, machinery, vehicles, computers, office furniture, and off-the-shelf software. Qualified improvement property (interior improvements to nonresidential buildings) also qualifies. The property must be used more than 50% for business purposes, and it must be purchased (not leased) and placed in service during the tax year you claim the deduction.
Can I use Section 179 for a vehicle purchase?
Yes, but vehicle deductions depend on the vehicle type and weight. Heavy trucks and vans over 6,000 lbs GVWR can qualify for the full Section 179 deduction. Heavy SUVs over 6,000 lbs GVWR are capped at $30,500 for Section 179. Passenger cars and lighter vehicles are subject to luxury automobile limits, which cap the total first-year depreciation (including Section 179 and bonus depreciation) at $20,400 for 2024.
What is the difference between Section 179 and bonus depreciation?
Section 179 allows you to elect to expense qualifying property immediately, up to annual limits. Bonus depreciation is an additional first-year depreciation allowance that applies automatically to eligible property. For 2024, bonus depreciation is 60% (declining from 100% in 2022). The key differences: Section 179 has a deduction cap and phase-out threshold; bonus depreciation has no dollar limit. Section 179 cannot create a business loss; bonus depreciation can. Many businesses use both together to maximize first-year deductions.
Does Section 179 apply to used equipment?
Yes. Since the Tax Cuts and Jobs Act of 2017, Section 179 applies to both new and used equipment, as long as the property is new to your business. The equipment does not need to be brand new from the manufacturer. This is a significant benefit for businesses purchasing pre-owned machinery, vehicles, or other equipment at reduced prices while still claiming the full Section 179 deduction.
Browse by Category
Explore detailed Section 179 guides, deduction tables, and examples for specific asset categories. Each page includes pre-computed tax savings at multiple price points, MACRS recovery schedules, and industry-specific advice to help you plan your purchases strategically.