Section 179 Deduction Calculator
Instantly expense business equipment and assets in 2025. See your Section 179 deduction, tax savings, and how it stacks up against 40% bonus depreciation.
Equipment & Business Info
The full purchase price of the business asset
All business assets purchased this year (phase-out starts at $2,890,000)
Section 179 cannot exceed your net business income
Your effective or marginal rate — used to estimate tax savings
Section 179 Rules for 2025
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and software placed in service during the tax year. For 2025, the maximum deduction is $1,160,000, with a phase-out beginning at $2,890,000 in total property placed in service. Unlike regular depreciation, which spreads deductions over several years, Section 179 lets you write off the entire cost in year one.
Key limitation: Section 179 cannot create or increase a net operating loss. Your deduction is capped at your taxable business income for the year. Any disallowed amount can be carried forward to future years.
Bonus depreciation in 2025 is 40% (down from 60% in 2024 and 100% in 2022). Unlike Section 179, bonus depreciation has no income limitation — it can generate a loss. It also applies automatically to eligible property, so you must elect out if you don't want it.
Qualifying property includes machinery, equipment, computers, office furniture, most vehicles, and off-the-shelf software. Real property generally does not qualify, though certain improvements may.
Maximize your equipment deductions alongside other business write-offs using our Business Travel Calculator and Home Office Deduction Calculator.
Based on 2025 Section 179 limits (IRC §179): $1,160,000 deduction cap, $2,890,000 phase-out threshold. Bonus depreciation rate: 40% per TCJA phase-down schedule. Section 179 limited to taxable business income; disallowed amounts carry forward. Does not account for state tax conformity, listed property limitations, luxury auto caps, or AMT. Consult a CPA or tax advisor for personalized guidance.