US Section 179 Calculator with Bonus Depreciation

Section 179 and bonus depreciation 2026: first-year deduction

For a business equipment purchase in the United States, the tool stacks three first-year deductions: Section 179 (up to $2,560,000 in 2026), bonus depreciation on the remainder (100% by default since P.L. 119-21) and then 20% MACRS depreciation. The tax saving equals that total × (federal marginal rate + state rate). A $180,000 machine is thus fully deducted, cutting tax by $68,400 at 38%.

How the tool calculates

1. Eligible cost = price × business-use share.
2. Section 179 (only above 50% business use; otherwise the tool shows "Ineligible") = eligible cost, capped at $32,000 for an SUV over 6,000 lb and $20,300 for a passenger car, and at the $2,560,000 limit reduced by purchases above $4,090,000.
3. Bonus depreciation = remainder × chosen rate (not for passenger cars, nor for vehicles used 50% or less for business; machinery keeps it on its business share).
4. Year-1 MACRS = balance × 20% (5-year property, half-year convention), or 10% straight-line (ADS) for a vehicle used 50% or less for business. For a passenger car, the whole first-year amount stays capped at $20,300: a $50,000 car gives $20,300.
5. Saving = total deducted × (federal bracket + state rate); net cost = price − saving.

Recalculated examples

A $180,000 machine, 100% business use, 32% bracket and 6% state rate: $180,000 under Section 179, a $68,400 saving and a $111,600 net cost. A $80,000 heavy SUV: $32,000 under Section 179 plus $48,000 of 100% bonus, so everything is deducted; with 40% bonus the total falls to $56,960 (32,000 + 19,200 + 5,760). For $4.5M of purchases the cap drops to $2,150,000.

Limits

• No Section 179 business-income limit, no progressive brackets and no state-specific rules.

Sources and dates: P.L. 119-21 of 04/07/2025, sections 70301 (100% bonus for property acquired after 19/01/2025) and 70306; IRS Rev. Proc. 2025-32 ($2,560,000, $4,090,000 and $32,000 for tax years beginning in 2026); Rev. Proc. 2026-15 of 23/03/2026 ($20,300); Publication 946 (checked 14/10/2026). An estimate, not a substitute for a tax adviser.

Frequently Asked Questions

What is the Section 179 limit for 2026?

$2,560,000 for tax years beginning in 2026, reduced dollar for dollar once property placed in service exceeds $4,090,000 (IRS Rev. Proc. 2025-32). For 2025 the amounts were $2,500,000 and $4,000,000, set by P.L. 119-21 of 04/07/2025.

Is bonus depreciation 100% in 2026?

Yes for property acquired after 19/01/2025: P.L. 119-21 made the 100% rate permanent. Property acquired before that date follows the old phase-down schedule (40% if placed in service in 2025). The tool applies the rate set on the slider, 100% by default.

How much can I deduct for an SUV over 6,000 lb?

Section 179 is capped at $32,000 for these vehicles in 2026, but bonus depreciation can apply to the rest. In the tool, an $80,000 SUV used 100% for business is fully deducted: $32,000 + $48,000 of bonus.

Section 179 or bonus depreciation: which should I use?

Section 179 is elected asset by asset and cannot create a tax loss, since it is limited to business income. Bonus depreciation has no cap or income condition and can generate a loss to carry forward. The tool applies Section 179 first, then bonus on the remainder.

Is this tool really free?

Yes, all tools on Kristools are 100% free and accessible without registration.

Is my data protected?

Yes. All processing is performed directly and securely inside your browser. No personal data is sent to our servers.