Section 179: What This Equipment Tax Deduction Means For 2026

Did you buy equipment and place it into service in the 2026 calendar year? Read on to learn how you can use the section 179 tax deduction to save money on your 2026 taxes. We’ll also explain the difference between section 179 and bonus depreciation.

 

 

What Is The Section 179 Tax Deduction?

Section 179 Definition

Section 179 is an expense deduction and part of the Internal Revenue Code (IRC). It allows businesses to deduct all or part of the cost of qualifying property in the tax year the property is placed in service, subject to applicable dollar and business-income limits.

 

The maximum deduction for 2026 is $2,560,000. Depending on your 2026 purchases and ability to use the deduction, your business could receive sizable benefits.

 

What Section 179 Is For

Section 179 of the Internal Revenue Code is intended to allow eligible taxpayers to expense certain qualifying business property rather than recover the entire cost through depreciation over multiple years. It helps offset the costs of maintaining and expanding businesses through equipment purchases, upgrades, and more.

 

According to the IRS, a wide range of equipment and other assets can qualify, such as certain types of heavy machinery, vehicles, office equipment, and software. Keep reading to learn exactly what assets qualify.

 

 

Can My Business Use Section 179?

What Businesses Can Benefit?

The tax deduction covers a broad range of equipment and business goods, so many different types of businesses can benefit from using it. Whether you’re a construction company owner, contractor, farmer, rancher, owner/operator in the commercial transportation industry, or other small or medium-sized business owner, you can consider using the section 179 deduction on qualifying purchases.

 

What Equipment & Purchases Qualify?

New and used equipment that is purchased and placed in service in the 2026 tax year currently may qualify for the section 179 deduction.

 

Whether you purchased or financed qualifying assets throughout the year, you can take advantage of the section 179 deduction. Even if you purchased equipment during end-of-year auctions, as long as those assets are placed in service before December 31, 2026, they will qualify for the deduction.

 

Qualifying assets may include the following items:

• Construction equipment
• Trucks and trailers
• Delivery vans
• Commercial vehicles
• Sport utility vehicles
• Computers
• Off-the-shelf computer software
• Appliances
• Office equipment
• Office furniture
• Farm Machinery
• Livestock

 

Consult the IRS Publication 946, How To Depreciate Property webpage for details.

 

 

What Are The 2026 Dollar Limits Of Section 179?

Here are the maximum limits for taking advantage of the section 179 tax code in 2026:

• Maximum write-off: $2,560,000
• Maximum total purchased: $4,090,000

 

The maximum section 179 expense deduction for the 2026 tax year is $2,560,000 (up from $2,500,000 for the 2025 tax year). This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $4,090,000 (by contrast, the limit was $4,000,000 for the 2025 tax year).

 

The IRS also specifies that the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2026 is $32,000 (up from $31,300 for the 2025 tax year).

 

How Is Bonus Depreciation Different From Section 179?

Bonus depreciation is commonly known as the “additional first-year depreciation deduction.” It is section 168(k) of the IRC.

 

Bonus depreciation is a tax incentive that allows businesses to deduct some or all of the cost of qualifying property in the year the property is placed in service, rather than recovering that cost over multiple years. This may sound a lot like section 179, but the two are different; both can, in some cases, be used in the same tax year.

 

The special depreciation allowance is generally calculated after any allowable Section 179 deduction and before regular MACRS depreciation. For the 2026 tax year, the bonus depreciation rate is generally 100% for qualifying property acquired and placed in service in 2026. Contact your tax consultant for more information.

 

Read our post about bonus depreciation in 2026 and how bonus depreciation compares to the section 179 deduction to learn more.

 

 

Use Section 179 Now

Don’t Wait—Watch The Timeline For Qualifying

If you purchased qualifying equipment and it is placed in service by December 31, 2026, you may be eligible to claim the Section 179 deduction on your 2026 federal income tax return. Enjoy the potential cost benefits when filing your 2026 taxes.

 

How To Take The Deduction

To claim the Section 179 deduction, taxpayers generally use Part I of IRS Form 4562, Depreciation and Amortization, and attach the form to the applicable tax return. Consult the 2026 Form 4562 and instructions when they are available.

 

DISCLAIMER: Currency does not provide tax, legal or accounting advice. The foregoing has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Limits and information mentioned is subject to change.

 

This is an updated version of an earlier post.
Original post: October 17, 2025
Updated: October 7, 2026