Section 179 vs. Bonus Depreciation Calculator (2026 IRS Limits)

By Web Asset House Studio · October 29, 2026 · Runs in your browser; nothing you type is sent or stored.

Buying a computer, machine or work vehicle for your business? Federal tax law gives you several ways to write it off in the first year. This calculator shows the first-year deduction under each one, side by side, using the limits from IRS Publication 946 and, for 2026, Revenue Procedure 2025-32.

Estimate only, not tax advice. It assumes tangible personal property in the 3- to 20-year MACRS classes, acquired and placed in service after January 19, 2025, a calendar tax year, and the half-year convention. It doesn't handle the mid-quarter convention (required if more than 40% of the year's depreciable property goes into service in the last 3 months), passenger automobile depreciation caps, real property, the 40% bonus election available for the first tax year ending after January 19, 2025, married-filing-separately allocation, partnership or S corporation pass-throughs, or state tax rules, which may not follow the federal ones. Use Form 4562 and its instructions, or a tax professional, for your return.

Tax year the property is placed in service

Limits for that year: Section 179 maximum —; reduced dollar for dollar once Section 179 property placed in service exceeds —; heavy SUV cap —.

Cost of the asset ($) Business use (%) MACRS property class Total cost of all Section 179 property you place in service this year ($; leave blank if this is the only item) Taxable income from the active conduct of your businesses, before Section 179 ($; optional, for the business income limit) Section 179 amount you elect for this asset ($; leave blank for the maximum) Heavy SUV or similar vehicle (rated over 6,000 and up to 14,000 pounds gross vehicle weight) subject to the SUV cap

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First-year comparison

First-year deduction under each choice
Depreciable basis (cost × business use)	—
Section 179 dollar limit after any phase-out	—
Section 179 elected	—
Section 179 deductible this year (business income limit)	—
Section 179 carried over to next year	—
A. 100% bonus depreciation only (the default if you don't elect out)	—
B. Section 179, then 100% bonus on any remaining basis	—
C. Section 179, then regular MACRS on the rest (bonus elected out for the class)	—
D. Regular MACRS only (no Section 179, bonus elected out)	—

Formulas used

Depreciable basis = cost × business-use percentage (Pub. 946).
Section 179 dollar limit = $2,560,000 for 2026 ($2,500,000 for 2025), reduced by the amount the total cost of Section 179 property placed in service during the year exceeds $4,090,000 ($4,000,000 for 2025), but not below zero. A heavy SUV counts at no more than $32,000 for 2026 ($31,300 for 2025).
Section 179 is allowed only if business use is more than 50% in the year the property goes into service.
Business income limit: the Section 179 deduction can't exceed your taxable income from the active conduct of your trades or businesses. The rest carries over to later years. The income limit is a Section 179 rule; it doesn't apply to bonus depreciation.
Bonus depreciation (the special depreciation allowance): 100% of the basis left after any Section 179 deduction, for qualified property acquired and placed in service after January 19, 2025, unless you elect out. The election out applies to a whole class of property (for example, all 5-year property) placed in service that year.
Regular MACRS, first year = remaining basis × the year-1 rate from Pub. 946 Table A-1 (half-year convention): 33.33% (3-year), 20% (5-year), 14.29% (7-year), 10% (10-year), 5% (15-year), 3.75% (20-year). Rounded to whole dollars.

Worked examples (from Publication 946)

Phase-out: in 2025 Jane Ash placed in service machinery costing $4,050,000, which is $50,000 over $4,000,000, so her dollar limit is $2,450,000. At $6,500,000 or more for 2025, there is no Section 179 deduction. With the 2026 figures, $4,140,000 of property gives a $2,510,000 limit.
Business income limit: Dean elected $125,000 of Section 179 costs but had $80,000 of business taxable income, so he deducted $80,000 and carried over $45,000.
Regular MACRS: $10,000 of 7-year office furniture with no Section 179 or bonus: $10,000 × 14.29% = $1,429 in year 1. A $39,000 item with a $24,000 Section 179 deduction and bonus elected out: $15,000 × 14.29% = $2,144 of depreciation plus the $24,000.

Things to weigh

Taking the whole cost in year 1 lowers this year's tax but leaves nothing to deduct later. If you expect a higher tax rate in later years, spreading the deduction may help. A tax professional can model that.
If business use of the asset later drops to 50% or less, part of a Section 179 deduction (and, for listed property such as vehicles, bonus and accelerated depreciation) has to be recaptured as income (Pub. 946).
Items under the de minimis safe harbor ($2,500 per invoice or item for most businesses) can be expensed without depreciation at all; see our de minimis safe harbor guide.

Sources

Sources checked October 29, 2026.