Federal estimate · tax years 2025 and 2026
Section 179 calculator
Section 179 can provide tax benefits to your customers. Enter an equipment price to see an illustrative federal estimate, using the $2,560,000 limit for 2026.
Illustrative federal estimate
- Section 179 deduction
- $150,000
- Bonus depreciation
- $0
- First-year regular depreciation
- $0
- Estimated first-year deduction
- $150,000
- Estimated net cost after tax savings
- $118,500
Assumptions. Equipment is placed in service in the selected tax year and used more than 50% for business. Only the business-use share is counted. Section 179 is applied first, then 100% bonus depreciation on the remaining basis (property acquired after January 19, 2025). If you opt out of bonus depreciation, the first-year rate for 7-year property (14.29%, half-year convention) is used. Federal only; state rules differ.
Not tax advice. This calculator gives an illustrative federal estimate using the assumptions shown. It is not tax, legal or accounting advice, and it is not an offer of credit. Eligibility depends on your circumstances. Consult a qualified tax professional. Financing is subject to lender credit approval.
Sources: Rev. Proc. 2025-32 (IRB 2025-45) · P.L. 119-21 §§70301, 70306 · IRS Publication 946. Figures checked September 2026.
Figures used
- 2026 deduction limit
- $2,560,000 Rev. Proc. 2025-32
- 2026 phase-out threshold
- $4,090,000 Rev. Proc. 2025-32
- 2025 deduction limit
- $2,500,000 P.L. 119-21 §70306
- Bonus depreciation
- 100% Property acquired after Jan 19, 2025 · P.L. 119-21 §70301
How Section 179 works with equipment financing
Section 179 of the Internal Revenue Code lets a business deduct the cost of qualifying equipment in the year it's placed in service, instead of depreciating it over several years. The deduction is capped, and the cap shrinks dollar for dollar once the total cost of qualifying property placed in service goes over the phase-out threshold.
Equipment must be used more than 50% for business, and the Section 179 deduction can't exceed taxable income from the business. Any excess carries forward. Bonus depreciation applies to the remaining basis and isn't limited by business income. A fair-market-value lease generally doesn't qualify; a lease with a $1 buyout is generally treated as a purchase.
Rules at state level differ, and your situation may change the result. Use this estimate as a starting point for a conversation with your tax professional.
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