Section 179 & Bonus Depreciation Calculator

See how much tax you can save in year one by expensing equipment or a work vehicle.

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The purchase

Your taxes

Limits (edit if they change)

Year-1 tax savings$24,650Deduction $85,000
Section 179$85,000Capped by income and limits
Bonus depreciation$0
Gain vs normal depreciation$2,372In present value

Deductions by year

YearWith 179 + bonusNormal depreciation
Year 1$85,000$17,000
Year 2$0$27,200
Year 3$0$16,320
Year 4$0$9,792
Year 5$0$9,792
Year 6$0$4,896
Year 7$0$0
  • The asset must be used over 50% for business and placed in service during the tax year. Section 179 cannot create a loss; the excess carries forward. Depreciation recapture applies on sale: ask your accountant.
  • Reference 2026 limits are editable; confirm with the IRS.

How it works

  1. Enter the cost, business use and asset type.
  2. Enter your business income and tax rates.
  3. Review the Section 179 limits.
  4. Read the year-1 savings and the year-by-year comparison.

Two ways to deduct fast

Section 179 lets you expense qualifying equipment in the year it is placed in service, limited by your business income. Bonus depreciation can then deduct a large share of what remains.

Timing, not free money

Faster deductions move tax savings earlier but reduce later depreciation. The present-value line shows the benefit of getting them sooner.

Frequently asked questions

What counts as qualifying property?

Tangible business equipment, certain software and vehicles used over 50% for business. Heavy SUVs have a lower 179 cap.

Can it create a loss?

Section 179 cannot exceed business taxable income; the excess carries forward.

Are the limits current?

Reference values are editable; confirm with the IRS each year.

Is this tax advice?

No. Talk to your accountant before buying.