Section 179 Deduction Calculator

About this calculator

Section 179 is a provision of the U.S. tax code that lets businesses deduct the full purchase price of qualifying equipment, vehicles, or software in the year it's placed in service, instead of depreciating it gradually over several years under normal MACRS schedules. The deduction is capped at a maximum dollar amount and phases out once total qualifying purchases exceed a spending threshold for the year, and it can't create or increase a net loss — the deduction is limited to the business's taxable income from active trades.

Small and mid-sized businesses use Section 179 to accelerate tax savings on equipment purchases — manufacturing machinery, business vehicles, computers, and off-the-shelf software commonly qualify — improving cash flow in the year of purchase rather than waiting years for depreciation to catch up. Because the dollar cap and phase-out threshold are set and adjusted by the IRS each tax year, always check the current-year limits before filing.

This calculator takes the cost of your qualifying asset and returns an estimate of the deduction available.